U.K. Firms See Lingering Fallout on Sales, Jobs From Virus

(Bloomberg) --

U.K. companies expect the damage to business from the coronavirus to linger on into next year, countering the optimistic noises coming from some Bank of England policy makers this week.

Firms in a central bank survey in June said sales in the second quarter would be almost 40% lower than they otherwise would have been due to the pandemic. They expect only a gradual recovery over the next year and warned of a persistent impact on jobs.

The figures follow comments from two BOE officials -- Jonathan Haskel and Chief Economist Andy Haldane -- who said they were starting to see reasons for economic optimism. The recovery looks V-shaped so far, Haldane said, and Haskel noted that activity is returning faster than expected.

Still, IMF Chief Economist Gita Gopinath told lawmakers on Wednesday that a strong bounce-back is far from certain, and that while activity might return quickly at first, the risk is that it could then plateau.

According to the BOE survey, firms expect an improvement in the coming months. Still, even by the first quarter of 2021, sales and employment will be about 10% below where they should be in normal circumstances.

The U.K. is planning to reopen pubs, restaurants and hotels on July 4, and the government and businesses are counting on the economy getting a big boost on the path to recovery.

©2020 Bloomberg L.P.