It took time, but the Industrial Revolution profoundly changed the way people worked. Out went cottage industries and in came giant factories. People migrated from rural areas to the cities.
Gradually, as economies became more service-sector driven, the big factory was replaced by the big office, but the principle remained the same: employees left their home in the morning for their place of work and returned in the evening.
That wasn’t true for everybody, clearly. Before the onset of the Covid-19 pandemic, the now ubiquitous term “working from home” already applied to about 5% of us.
In the past seven months, though, the picture has been transformed. As the Bank of England’s chief economist, Andy Haldane, has said, that number rose to 50% when the lockdown was at its severest. Even now, one in three people are WFH.
The implications of this shift are everywhere: from the reduced footfalls at city centre shopping malls to the losses being racked up by train operating companies. But there is more to the WFH revolution than that.
As Haldane notes, there is no evidence that WFH has boosted the UK’s notoriously poor productivity, in part because the change happened suddenly and many people were not geared up to operate in cramped flats with small children demanding their attention.
Output per worker does not seem to have suffered, because those WFH are prepared to work longer hours – in effect giving back some of the time they are saving from the daily commute to their employers.
Happiness levels appear to have risen, in part because workers don’t much care for beginning and ending the day on crowded trains, tubes and buses, and in part because they feel they have more control over their working lives.
On the other hand, as the months roll by, the novelty will wear off. Workers will find that they miss human contact, bouncing ideas off colleagues, the feeling of being part of a team.
Haldane thinks there is a balance to be struck: some days at home for the peace and quiet; some days in the office to fire the imagination. That sounds right, but it will still represent a sea change in the way we work.
A crude measure of the global economy
By the standards of the spring, when the price briefly went negative, a 3% fall in the price of oil in a single day is neither here nor there. But the cost of crude remains a reasonable bellwether for the state of the global economy – and the signs are not promising.
True, some of the weakness in the oil price on Monday was due to a rebound in Libyan production, but a bigger factor was evidence that activity in both the US and western Europe is slowing down as a result of the rising number of Covid-19 cases.
On current trends, the last week of the US presidential election race will see the daily number of new cases in the world’s biggest economy hit 100,000 for the first time. In the four biggest eurozone countries – Germany, France, Italy and Spain – cases are going up at an alarming rate.
As a result, little attention is being paid to this week’s eurozone GDP figures, which will be spectacularly good, because they are already history. Markets – including the oil market – are much more concerned that business sentiment in Germany declined in October for the first time since the end of the lockdown.
It would be unwise to bank on oil producers boosting the price through production curbs. The Opec cartel – even with the addition of Russia – is not the force it once was and, in any case, the real barrier to a higher oil price is the weak state of global demand. That will only pick up when vaccines for Covid-19 become available.
Are the knives out for Rishi Sunak?
The revelation that Rishi Sunak has put his assets into a blind trust is perhaps not all that surprising. The chancellor is loaded – he is, by all accounts, the richest MP – after working first for Goldman Sachs and then running his own hedge fund. Blind trusts are not illegal, and by using one Sunak can say he faces no possible conflicts of interest.
There are two issues, though. One is whether Sunak can avoid calls for greater transparency about how the trust is being operated, and in particular whether it is making use of offshore tax havens. A second is why the story is all over Conservative-supporting papers. That might suggest that someone in the government wants to take the chancellor down a peg. Perish the thought.