(Bloomberg) -- HSBC Holdings Plc would like the Bank of England -- specifically the man in charge of forecasts -- to tone down its optimism over the U.K. economy.
“Unlike BOE chief economist Andy Haldane, who thinks it is now time to see the economic glass as ‘half-full,' recent data outturns have made us more pessimistic about the lasting economic impact,” HSBC's senior economist Elizabeth Martins said in a report to clients. “There are plenty of reasons to remain concerned.”
Haldane has said Britain's economic bounceback from the coronavirus-induced recession is looking V-shaped so far. Not all his colleagues on the Monetary Policy Committee seem comfortable with that view though -- Silvana Tenreyro has warned of a likely flattening off later in the year and Governor Andrew Bailey has said there are a “lot of hard yards” ahead.
A compilation of forecasts published by the U.K. Treasury on Wednesday also showed a gloomy shift among economists. The average prediction for 2020 is now a 10% contraction, versus 9.2% in July.
Martins now reckons the British economy will shrink more than 10% this year, and still be almost 5% smaller than its pre-virus level by the end of next year. That's somewhat more downbeat than the BOE's projections.
Still, she's not forecasting any more monetary easing by the BOE just yet, saying further fiscal stimulus from the government is more likely. If the BOE does need to act, as most economists believe, she predicts more bond-buying, easier loans for companies, and potentially another cut to the 0.1% benchmark interest rate.
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