When Andrew Haldane claims post-Covid UK is ‘poised like a coiled spring’, he does no favours to either his reputation or the debate over the future
To state the blindingly obvious, the chief economist of the Bank of England, Andrew Haldane, is an intelligent man. No boilerplate praise, this: his speeches on subjects as varied as how to reform economics and the importance of the voluntary sector have been model interventions – both serious and ever-so-slightly subversive. Yet when Mr Haldane writes a newspaper op-ed that claims the post-Covid economy is “poised like a coiled spring”, as he did last week, he risks looking not only silly but, worse, choking the debate over the future of the UK.
To be sure, his argument rests on firm logic. Many workers have spent the past year still employed but with few outlets to spend their incomes, so have built up around £125bn in household savings. Get those jabs, fling open the pubs, allow the football terraces to fill – and let the good economic times roll! And indeed the recent economic news from the UK and elsewhere has been better than hoped.
Yet this is not your normal recession. Too much rests on factors completely out of the hands of chief executives, finance ministers and, yes, central bankers. Mr Haldane has already sat this class. Last summer, he forecast the UK would swiftly rebound from its lows, in a recovery shaped like a V. Not long after, the country went into its second lockdown. That V turned into, at best, a W. The unknowns about this virus, its mutations and their propensity to spread suggest a need for caution and openness to a wide range of outcomes, rather than tabloid tiggerishness.