Professor Jonathan Haskel explains how the Bank of England measures the long-term economic damage (known as scarring) that shocks like Covid can cause.
He argues that the economy will be less damaged in the long term, than we feared. This is because fewer jobs have been lost, and companies have invested more in their businesses than we thought they would at the start of the crisis.
But because there is so much uncertainty about the future, he thinks interest rates should not be raised at this point.
Will the pandemic “scar” the economy?
Slides 
