“They have fixed costs in many cases, although some of those might have been deferred. Certainly, the taxes have, but they always have some expenditure. So, I think the longer it goes on, the more retail and hospitality establishments will go bankrupt. And so, the quicker the government can get things moving again, the more likely it is we can save some of these small businesses.”
On the big picture, Dr Hayward also has his concerns: “I think it's is a bit unclear how rapid the emergence from the lockdown will be, but I think there's a risk that it's going to be quite painful over the next six months and that the end of the furlough scheme will mean that businesses will start to lay people off. The fact that we have more people becoming unemployed will be a bit of a shock.
“It's not, I don't think, going to be a smooth bounce back to where we were before. It's going to take a long time to get there, if we ever do. It’s probably going to be quite a painful adjustment process to move the economy back to even the level of output and employment which we had back in January and February.”
It’s not all doom and gloom, though, with Dr Hayward believing the pandemic is an opportunity to work on green projects in order to reach a carbon neutral economy.
He said: “If the government borrows money and embarks on these projects, building infrastructure - which is going to help the economy, building green energy resources, introducing public transport which is better for the environment and changing the insulation of homes, all of these need to be done anyway.
The government can employ people who have been made unemployed, get them spending and give them more confidence and skills”.
Listen to the full podcast with Dr Hayward.