Bank of England boss Andrew Bailey says UK economy recovering from coronavirus— with housing and new cars on the up
BANK of England boss Andrew Bailey said the economy is starting to recover from Covid — with green shoots appearing in Britain’s housing and new car markets.
He said there are signs of activity returning “quite strongly” in both sectors.
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But hospitality and entertainment, among the UK’s biggest employers, continue to struggle.
Governor Mr Bailey told a webinar organised by the Bank: “We are seeing activity return. We are beginning to see this recovery.”
But he admitted the Bank did not know how much long-term damage would be done to the economy after it suffered a “23 to 25 per cent” contraction in the second quarter.
He insisted interventions by the Bank and Government during the pandemic have worked so far.
Brits are set for a period of 'natural caution'
He added: “Between us, we are doing everything we can.” He also pointed to the fact that the nation’s bank balances have risen which was “very unusual in a recession”.
The bank’s main action at the start of the coronavirus crisis was to ramp up its quantitative easing (QE) bond-buying programme to £745billion.
Mr Bailey said: “We had to do something very fast, very big.”
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He said the decision to go for a mammoth amount of QE — likened to printing money — was correct although the Bank’s balance sheet was now equivalent to about 30 per cent of economic output.
He also believes Brits are set for a period of “natural caution”.
A snap poll on the webinar found 64 per cent of participants were “very pessimistic” about the economy.
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