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Bank governor Bailey warns against early end to lockdown

Andrew Bailey Boe pic

Andrew Bailey: ‘think about human psychology’

The Bank of England’s new governor has warned against lifting the UK’s Covid-19 restrictions too early.

Andrew Bailey said that the economic damage would be even worse if the outbreak re-emerged and ministers were forced to re-impose the lockdown.

Mr Bailey, who succeeded Mark Carney last month, told the Daily Mail,:”We have to be careful when thinking about human psychology

“If we had a lifting and then [lockdown] came back again, I think that would damage people’s confidence very severely.

‘If we have a false start… that would have potentially quite difficult effects.”

He says the UK banking system could struggle under a sustained shutdown of the economy.

“There is a breaking point in any system, we can’t deny that,” he said in his first interview.

He added that the simple operational challenges of remote working and staff sickness were at least partially responsible for a slow start to a Treasury programme to promote small business lending by underwriting up to 80% of new loans.

“This gums up the operational side. It is clearly not satisfactory and [the system] clearly needs to be un-gummed.

“I know from a painful past that lending to small firms is not easy,’ he said. “I am very keen, very sensitive that we don’t get back into a situation we are still trying to clear up after the last crisis. The last thing we need is a re-run of those problems.”

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