BoE Deputy Governor Ben Broadbent is concerned that economic recovery could be slow after coronavirus lockdown exit, event though a rapid bounce back is “certainly conceivable, certainly possible.” He said, “the question that we will have to think about is whether behavioural responses of people mean that even if the government-imposed lockdown is lifted, demand may remain weak in some areas just out of people’s natural caution.”
He added that a -35% contraction in the economy in Q2 was possible. The “coronavirus crisis is quite unlike a normal cyclical downturn.” BoE’s stimulus was designed so that “hit to demand does not outstrip that to supply.” The size of the virus hit is “very, very material” after all.
