Silvana Tenreyro, a decision maker at the Bank of England, said resuming Covid-19 in the UK would likely be an “incomplete V” because people and businesses are spending cautiously during the pandemic.
Tenreyro expects a first big acceleration in growth between July and September as buyers change their behavior and unemployment rises.
His comments came after May’s GDP figures disappointed with growth of only 1.8 pc over the month, as the lock restrictions were only gradually lifted.
The assessment of the rate calculator is much less bullish than that of his colleague Andy Haldane, chief economist of the Bank, who said “so far, therefore V” on the shape of the recovery.
She said, “The behavioral responses mean that the UK economic outlook will continue to depend on the global and national spread of Covid-19. Assuming that the prevalence is gradually decreasing, my main case forecast is that the GDP follows an interrupted or incomplete trajectory in “V”, with the first quarterly increase in the third quarter. ”
Tenreyro suggested the coronavirus would lower inflation for a while, despite figures from the National Statistics Office showing a surprise rise in inflation last month to 0.6% – although still well below the Bank’s 2% target.