RECOVERY IS IN OUR HANDS, SAYS BANK OF ENGLAND ECONOMIST
THE Chief Economist of the Bank of England used the platform of speaking at the Cheshire and Warrington Local Enterprise Partnership’s annual meeting to highlight that the UK economy is recovering faster than expected from the impact of the Covid-19 pandemic.
Andy Haldane’s keynote address at the event – held virtually this year – stressed that while the rising level of Covid infections, higher unemployment and Brexit, were all a concern, as a society we must be wary of “catastrophizing”.
He said good news on the economy is being crowded-out by fears about the future, particularly in reference to the strong third quarter bounce back.
“We now expect GDP to be around 3-4% below its pre-Covid level by the end of the third quarter. In other words, the economy has already recovered just under 90% of its earlier losses.”
He said this was a “pretty remarkable” and resilient performance and praised the way so many businesses have been able to pivot their operational model by harnessing digital technology.
Mr Haldane acknowledged that the rising numbers of Covid cases across the UK were risks to business activity and jobs, but that policy interventions were in place to contain them.
“Some degree of caution is desirable in how we socialise, shop and work to prevent the spread of this awful disease but we need at the same time to prevent healthy caution morphing into fear and fatalism,” he said. “Pessimism can be as contagious as the disease – and as damaging to our economic fortunes. Avoiding economic anxiety is crucial to support the on-going recovery.”
The impact of Covid-19 had not been felt equally, he added, backing calls for further regional solutions.
“Even before this there were sharp divides in regions and between regions. The Covid crisis has not hit equally, impacting young people, women, and the poorest in our society, so we have to redouble the efforts to level up.
“There is no question that if the problem is at local level, the solution should be delivered at a local level. We have a Devolution White Paper, which will hopefully be a step in the right direction.”
Philip Cox, chief executive of Cheshire and Warrington LEP, said: “The reports we get from the business community here bear out the conclusion that Andy Haldane has drawn – that the economy has recovered far quicker than we initially feared. This is a tribute to the resilience of the people and places in our region and no doubt elsewhere. There are challenges ahead, and local lockdowns are a big shock to the system, but we can successfully navigate a way forward.”
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