Ben Broadbent, deputy regulator of the Bank of England’s monetary policy, told CNBC that tight limits following the release of vaccines would be likely to damage the UK’s economic recovery.
Speaking to CNBC on Friday, Broadbent said there would be potential for tight outer borders only to open inside once ubiquitous coronavirus vaccines put pressure on the economy.
“One of the lowest risks we are exposed to is the possible emergence of new changes that are less susceptible to the vaccines. We have not studied in detail the effects of the different types of restriction,” he said.
“My instinct is that if you closed borders, that would be negative for both demand and the supply side of the economy.”
Broadbent said new variants of Covid-19 came out a few months ago as a key consideration in the Bank’s outlook.
“That is one of the reasons why, as I say, the strength of consumption growth rate and GDP (gross domestic product) in this forecast should not be overstated, and it is because that ‘s the fact that the rate for both of those things is actually lower than we expected and the new forecasts for the second half of this year are than they were three months ago, “Broadbent said.
The BOE on Thursday reduced its GDP growth forecast for 2021 to 5% from the 7.25% projected in the Monetary Policy Report in November, and now has a 4% decline for the first quarter with that the country is still under national austerity measures.
Broadbent said the public could be “scared” to spend on things that put them at risk of infection and that these concerns could go down even after vaccines are generally administered, but suggested them that this could be balanced.
“One of the things we’ve seen through this program is pretty much moving away from things that put people at risk of infection but towards things that aren’t,” he said.
“Finally, I should say that the evidence from last summer was not just in the UK but around the world and especially in that part of the world. suffer from locks, that wear comes back very quickly once you remove those pads, at least initially. “
Broadbent said the BOE had allowed some of the concerns about virus exposure and its impact on consumer spending to be approved but suggested that this does not mean that total consumption will not be recovered. after relaxing restrictions.
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