Andy Haldane, said the recovery in the UK – and globally – had come “sooner and faster” than expected. Mr Haldane, who also sits on the Bank’s interest rate-setting committee, said that the UK economy was benefiting from a greater than predicted underlying strength in consumer spending across the country. He added: “It is early days but my reading of the evidence is so far, SOV. “The recovery in both the UK and global economies has come somewhat sooner, and has been materially faster, than in the MPC’s May Monetary Policy Report scenario – indeed, sooner and faster than any other mainstream macroeconomic forecaster.”
The MPC is the Bank’s Monetary Policy Committee that sets out the strategy to meet the 2 percent inflation target in a way that helps to sustain growth and employment.
Mr Haldane’s speech at a webinar comes after the Bank recently said it expected gross domestic product (GDP) to tumble by 20 percent in the first half of this year, which is less than the 27 percent it predicted in May.
But governor Andrew Bailey recently warned against getting “carried away” by signs the recession may not have been quite as steep as expected, with the Bank launching another £100billion of quantitative easing (QE) to help boost the economy.
Mr Haldane was the only member of the nine-strong MPC to vote against increasing QE in the June meeting.
In his speech he said if the economy continues recovering on a similar path, then the loss in annual GDP could be far lower than first feared, at eight percent against the 17 percent forecast in May.
But he cautioned some of this may be down to pent-up demand, as well as the massive Government support for households and businesses through the scheme to furlough workers on 80 percent of their pay.
He also said there was a risk of soaring unemployment when the Government support measures end, which could impact the path of recovery.