Comments by BOE governor, Andrew Bailey
- Expects the recovery of the economy to happen over time
- Expects the effects on demand to go on for around a year after lockdown
- Expects there to be some long-term damage to the capacity of the economy
- But in the illustrative scenario, these effects are judged to be relatively small
The BOE set out an illustrative scenario, in which they expect economic growth to fall sharply in 2H 2020 with the UK economy shrinking by 14% before rebounding next year.
Just take note that this scenario is conditional on a lot of assumptions still, namely that social distancing will remain as they are until early June before being gradually unwound in Q3.
Meanwhile, BOE policymakers Haskel and Saunders - the two dissenters on QE - are saying that there would be greater economic scarring without more stimulus at this stage.
