The governor of the Bank of England has warned of a hit to the economy from a premature end to the UK’s coronavirus lockdown, saying it would “damage people’s confidence very severely”.
Andrew Bailey was speaking amid speculation over the timing for an easing of social distancing measures to combat COVID-19 – with businesses eager to limit the damage from the plunge in activity.
Just last week, Mr Bailey used a conference call with journalists to admit that a scenario, published by the independent Office for Budget Responsibility, of a 35% plunge in GDP in the second quarter of the year was “not implausible”.
As ministers and health experts urge caution over relaxing the lockdown, first introduced on 23 March, Mr Bailey told the Daily Mail: “If we had a lifting and then (lockdown) came back again, I think that would damage people’s confidence very severely.
“If we have a false start… that would have potentially quite difficult effects I think.”
He added that the lockdown could only be lifted after employers were able to ensure staff were safe during their commute and at work.
The governor used his session with journalists last week to urge banks to speed up their lending to businesses through the Coronavirus Business Interruption Loan Scheme (CBILS) amid revelations just £1.1bn had been handed out.
In contrast, the Bank had lent £7.6bn to large firms, as of last Wednesday.
He said then: “Banks, notwithstanding the stress they are working under now, have to put their backs into it and get on with it.
“I agree it does have to be tackled because otherwise we are going to destroy people’s livelihoods or get scarring of the economy.”
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