The Bank of England’s chief economist Andy Haldane recently said that the economy is like a “coiled spring”, ready to bounce back strongly when the pandemic is over. He’s right - in more ways than one.
Bank of England data next week will show why. They’ll show that the pandemic has strengthened households’ balance sheets, at least in aggregate. They’ll show that consumer debt has fallen and that our bank deposits have swelled by more than ten per cent in the last twelve months, the fastest annual growth since the 90s.
We have, therefore, the cash to spend. And there are obvious places where we’ll do so. When they reopen, pubs and restaurants could see a boom because of the Joni Mitchell effect: you don’t know what you’ve got till it’s gone. Spending on home improvements will be swelled by the simple fact that more people are moving house: mortgage approvals at the end of last year were at their highest level since before the financial crisis. The fear of being quarantined if we go abroad will encourage us to go on staycations. And there are some things we cannot so easily buy on the internet: your correspondent wants a new guitar, but needs to try it in the shop before getting it.