Bank of England interest rate-setter Andy Haldane has said that the UK government support should continue until the Coronavirus pandemic ends.
In an interview with The Guardian, Haldane said that unemployment was “public enemy number one” and that the government should continue job support to prevent the unemployment rate creeping higher.
Since the pandemic, unemployment levels have risen from below 4% to over 6%.
“For me, many decades on, it remains public enemy number one, because of the devastating impact it has on people’s lives and their families’ lives,” he said.
“Policy has been tremendously important. A huge amount of insurance has been provided by the government and the Bank of England – supporting people’s jobs, supporting incomes, supporting businesses and supporting borrowing costs. Without that insurance the outcome for jobs, incomes and the economy would have been massively, massively worse.”
“Policy insurance has been crucial and will remain crucial during that bridging period as we hopefully squeeze the risk of the virus out of the system and reduce the risk of losing jobs and businesses. We need to provide that bridge, that insurance policy, for as long as the risk of either or both those things remains high.”
He added that the Bank of England would continue to provide support for as long as was needed.
Haldane said that there was still a long way to go beyond the Covid crisis and providing support is necessary for the UK population. He said: “We are still in a hole and the hole is still deep. We need to keep climbing out that hole through policy measures and the vaccine. But once we have climbed out – and we will – we mustn’t forget about long-term structural issues: what will give us good work at good pay.”
Rishi Sunak said in November that he would be extending the furlough scheme until the end of April.
The chancellor also announced that government-backed loans that are designed to support firms throughout the pandemic would continue to give “certainty well ahead of the 45 day redundancy notice period, with budget setting out the next phase of support more than 45 days before the new end date of the scheme”.
“Our package of support for businesses and workers continues to be one of the most generous and effective in the world – helping our economy to recover and protecting livelihoods across the country,” said Sunak.
“We know the premium businesses place on certainty, so it is right that we enable them to plan ahead regardless of the path the virus takes, which is why we’re providing certainty and clarity by extending this support.”