Andrew G Haldane: The second quarter

Speech by Mr Andrew G Haldane, Executive Director and Chief Economist of the Bank of England, during an online webinar, London, 30 June 2020.

The views expressed in this speech are those of the speaker and not the view of the BIS.

I would like to discuss today the economic outlook in the UK in the light of the Covid crisis and the way monetary policy is responding to this crisis. There is a debate about which letter of the alphabet will best describe the path of the economy, with some scepticism about the V-shaped scenario path in the Bank's May Monetary Policy Report (MPR). It is early days, but my reading of the evidence is so far, so V.

Covid-19 is, first and foremost, a global public health crisis. The measures put in place to contain the spread of this terrible disease have been necessary, but have had severe economic and financial consequences. As a result, most countries around the world are facing a twin crisis of public and economic health.

The economy in the period ahead will continue to be shaped by the virus and policy responses to it. The economy will also, though, be shaped by the behavioural responses of households and businesses, and the policy responses of Governments and central banks, to these shocks. Understanding those responses is the purpose of my comments today.