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Next coronavirus waves will determine UK economy’s path: BoE’s Haldane

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By Andy Bruce

LONDON, July 7 (Reuters) – Further waves of the novel coronavirus are surely on the way and they will be one of the determinants of Britain’s economic outlook, Bank of England Chief Economist Andy Haldane said on Tuesday.

“How big will be the second and third and fourth wave peaks? They surely will come,” Haldane said in an online talk for Buckingham University.

“What’s to play for is how large those peaks will be.”

Haldane, who last week described the shape of Britain’s economic recovery from the coronavirus lockdown as “so far, so V”, said household spending was bouncing back sharply.

“Since ‘Super Saturday’, we’ve seen something of a pick up too of people spending in restaurants and bars,” Haldane said, referring to the reopening of pubs and eateries at the weekend.

“That leaves the level of activity still materially below its pre-COVID levels. But nonetheless, the direction of travel has been upwards.”

He repeated his view that the recovery so far had been faster than the BoE or any other mainstream economic forecaster had predicted, although he acknowledged there were huge uncertainties about the longer-term outlook.

Other economists have said the current rebound in activity may be no more than a release of demand that had pent up during lockdown and that talk of a recovery in the true sense may be premature. (Reporting by Andy Bruce, Editing by Paul Sandle)

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