Andrew Bailey

This morning, Mr Bailey said that a recent rise in interest rates in financial markets was consistent with an improvement in the economic outlook.

Mr Bailey told Today on Radio 4: “We have seen some increase in interest rates over the last month or so, as have other countries. My assessment so far is that that is consistent, I think, with the change in the economic outlook.”

He said: “I’m now more positive but with a large dose of caution. There are now risks on the upside.” Mr Bailey added that the economy would recover and get back to its late 2019 level by about the end of this year.”

The BoE is expected to hold interest rates at their historic low of 0.1% and its bond-buying programme unchanged at £895 billion ($1.25 trillion) on Thursday at the end of its March meeting.

Mr Bailey said: “There has been a very large build-up in saving in the economy. The question of course then is: to what use will those savings be put?”

He said that pre-COVID-19 levels of office working are unlikely to return and most workers will adopt a hybrid approach to their jobs when restrictions ease.

He told Today: “I think we will see things change, because I think some habits and some practices will prove to be sustainable. I think there will be for many people more of a hybrid model of working at home and working in a place of work.

“I think we’ve already seen the retailing industry change quite dramatically in the last year and although I would expect some of it to change back it, it won’t entirely change back.

“I would be very surprised if we went back to exactly as we were before Covid.”