July 1, 2020
LONDON (Reuters) – Bank of England interest rate-setter Jonathan Haskel said there was a risk that Britain’s economy would be harder hit by the coronavirus crisis than the central bank has predicted and there were worrying signs of rising unemployment.
“I believe the current stance of monetary policy is appropriate but, on balance, risks are to the downside,” Haskel said in remarks he was due to deliver online to the Brighton Chamber of Commerce on Wednesday.
Haskel was among the eight members of the nine-strong Monetary Policy Committee who voted last month to expand the BoE’s bond-buying programme to help the economy cope with the shock of the coronavirus lockdown.
In his remarks, Haskel said there had been some signs that economic activity was coming back from its initial slump more quickly than the BoE thought early on in the crisis.
“But we should remember this past quarter is still likely to see by far the largest decline in output since quarterly national accounts began,” he said. “Worryingly the indicators of rising unemployment are already revealing themselves.”
There was a lot of uncertainty about how many of the workers who are temporarily laid off under the government’s furlough scheme would be able to return to their jobs, he said.
Haskel’s view on the outlook was more downbeat than that of the BoE’s chief economist Andy Haldane who on Tuesday said Britain’s economy appeared to be on course for a V-shaped recovery although high unemployment was a risk.
Haldane cast the lone vote against the BoE’s expansion of its bond-buying programme in June.
(Writing by William Schomberg; Editing by Catherine Evans)