Andrew G Haldane: Avoiding economic anxiety

Speech by Mr Andrew G Haldane, Executive Director and Chief Economist of the Bank of England, at the Cheshire and Warrington LEP Economic Summit Webinar, 30 September 2020.

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

Thank you for the invitation to speak at this Cheshire and Warrington Local Enterprise Partnership (LEP) Economic Summit. Through my colleague on the Industrial Strategy Council and former Chair of the LEP, Christine Gaskell, I know the excellent work the LEP does in supporting the local economy and community. That support has never been more important given the risks facing individuals, businesses and communities.

Given those risks, I thought I would focus today on the economic outlook in the UK, updated in the light of events since the publication of the Bank's Monetary Policy Report in August. Plenty has since happened. But one factor has remained the same: the extra-ordinary degree of uncertainty about the economic outlook. That makes monitoring the economy closely, and setting policy to support it, more important than ever.

At present, the largest clouds on the economic horizon in the UK come from: the effects of rising numbers of Covid cases across the UK and the accompanying policy measures taken to contain them; risks to business activity and jobs in the light of these public health developments; and the effects of moving to new trading arrangements with the EU at year-end. This unholy trinity of risks give good grounds for caution.