Dispelling fear among the public will be crucial to the economic recovery

It’s worth remembering that in a recession everything always feels bad, but every one in the past has been followed by a recovery, writes Hamish McRae

The high street has been hit hard by the lockdown (PA)

Fear is holding back the economic recovery. But if people are scared of spending money in the shops (suitably masked) or taking public transport to the office, all the urging from the government won’t make them do so.

In the past 24 hours we have had a warning that a second wave of Covid-19 could possibly kill 120,000 of us this winter under a worst-case scenario, coupled with the dire forecasts from the Office for Budget Responsibility (OBR) that unemployment could peak at 13 per cent in the early park of next year. Add in the confusion about compulsory masks in shops and the rational conclusion for most people would be that if you are not scared you’re not paying attention.

The danger of a downward spiral is obvious: people hold back on spending, which means that temporary workers and young people seeking their first jobs get particularly hard hit, while those in established careers try hunker down in case they find that they too are made redundant. That cuts demand even more.