We do know that as of now many people expect working from home to remain more common after the Covid pandemic is over. Half of new remote workers say they would like to continue to work from home all or most of the time even when lifting restrictions permits a return to normal working patterns (Felstead and Reuschke, 2020). Employers in some sectors also expect the proportion of staff that regularly work from home to more than double (Chartered Institute of Personnel and Development, 2020 and DMP, 2021)1, and many contacts of the Bank’s Agents expect a hybrid model of two to three days a week spent in the workplace to become the “new normal” for office workers. What is the evidence so far for the impact of Covid on productivity and investment? Here we can turn to the information that comes from the regular surveys of the Bank’s Decision Maker Panel (DMP) (Bloom et al., 2020). Labour productivity in the UK tends to be pro-cyclical. This does not appear to be the case in the Covid shock. So far during the pandemic labour productivity per hour appears to have risen, but with a tendency to reduce over time (Chart 2). There is, however, a lot more going on under the surface. There The February 2021 Decision Maker Panel survey asked businesses for the first time about what proportion of their employees’ time was spent working remotely, both pre- and during Covid, as well as their long-term expectations.
A minority of regimes, of which Hong Kong is one, focus on a stable external value of the currency - in Hong Kong's case through the particular mechanism and discipline of the currency board. The more externally oriented an economy is, the greater is the weight which may need to be attached to exchange rate stability within the overall concept of monetary stability. There are various pros and cons of each approach. Inflation targeting is less precise, in that it is necessarily based on forward projections, and verifiable indicators of success are only available after a timelag. It also requires a reasonably accurate forecasting process, which may be simpler to realise in a relatively closed than in a highly open economy. Nevertheless, experience of several countries shows that inflation targeting is capable of delivering good results. An obvious advantage of a fixed-rate regime is that compliance can be monitored very directly and unambiguously in real time; and, in the currency board version, the regime operates by automatic mechanisms rather than by the discretion of a central bank. It may, however, result in a less stable inflation rate, although, assuming that monetary policy in the country of the anchor currency is conducted responsibly, extremes of hyper-inflation or deflation will be avoided.