Why recovery from a global coronavirus recession will be determined by the people – not governments

The shutdown has made people realise what they really value and what is froth. It may well lead to the sort of spending habits we need for sustained economic recuperation, Hamish McRae says

How many of the changes we have made in our daily habits will stick? (PA)

The opening up has begun. Across the world, governments are giving instructions as to what we should do and deciding how long they can go on pumping money into their economies. Businesses are mostly trying to figure out how many staff to keep on once the support ebbs – although some, such as the online retailers, are frantically trying to meet booming demand.

Government and business will not be the most important in determining how quick the recovery is, however. It will be us. Consumers will decide whether this will be a reasonably swift pull-out from recession, or a long, slow slog, and we will determine with our cash how it plays out – or, rather, with our credit and debit cards because physical cash has been one of the casualties of Covid-19.

So far, two things have happened to our spending. There has been an overall reduction that varies from country to country but typically has been a 10-15 per cent decline. And there has been a radical shift in the pattern of sales, with a surge in spending on things for the home. Unsurprisingly, the market reflects demand. I am told that in America the price of little plastic paddling pools has shot up from $60 (£49) to $140.