Bank economist's forecast
Britain like a ‘coiled spring’ ready to start spending
The Bank of England boss sees a summer of spending (pic: Terry Murden)
Britain is like a “coiled spring” with the public ready to spend billions saved during lockdown, according to the Bank of England’s chief economist.
Andy Haldane says the vaccine programme is allowing the public to start planning for a spending spree once the restrictions are lifted.
Writing in the Daily Mail, Mr Haldane says: “The rapid rollout of the vaccination programme across the UK means a decisive corner has been turned in the battle against Covid.
“A decisive corner is about to be turned for the economy too, with enormous amounts of pent-up financial energy waiting to be released, like a coiled spring.
“With 13 million of the most vulnerable people already vaccinated, the risk of death or hospitalisation in the UK has already probably halved.”
The turn in sentiment was likely to be rapid, he says.
“Having been bottled in for a year, most people are desperate to get their lives, including their social lives, back.”
Mr Haldane predicts that by the end of June households will have amassed ‘accidental savings’ of up to £250 billion.
He believes they will spend a big chunk on socialising after being ‘bottled in’ for months, unable to enjoy holidays or meals out.
“When given the opportunity to do so safely, they will seize it,” he says.
He expects a rise in shared social experiences -–from pubs to sports to cinema – as seen during last summer’s Eat Out to Help Out scheme.
Mr Haldane says people might increase their normal routine of pub, cinema or restaurant visits as they make the most of being released from months of being bottled up.
Some analysts warn that the economy is divided. Many have been able to continue working and have built up savings, including money that would have been spent on commuting, while tens of thousands have lost their jobs and household debts have risen.