LONDON – Bank of England governor Andrew Bailey today said UK economic output in the third quarter was between 7% and 10% below pre-pandemic levels.
While it was far better than at the start of the Covid-19 crisis, he warned that there is still an unprecedented level of uncertainty, and that the risks to the economy are still to the downside.
“We think, in the third quarter, on average, activity in the economy will probably (have been) somewhere between 7% and 10% below pre-Covid levels,” he told an online conference.
“And while that number was obviously much better than we had in the spring, it still... produced a very big recession.”
Recent official data has shown that the UK economy shrank by a fifth in the second quarter, which coincided with Britain being in lockdown.
Bailey added that the economy faces the prospect of an “uneven” recovery as the government battles a second wave of rising infections with tighter restrictions, particularly on the hospitality sector.
“When you look at areas of activity in the economy that require more close social interaction, it’s no surprise that they have been the weakest to recover.
“Other areas of the economy have actually recovered very strongly – and a few areas of the UK are ahead of where they were pre-Covid.” – AFP, October 8, 2020
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