Mr Bailey told a panel discussion hosted by the World Economic Forum yesterday that recovery from the coronavirus pandemic would not be normal and there would be some permanent damage, but that the bank has seen “evidence of elements of that recovery starting”.

Last month, the bank said that the economy could shrink by 14% this year, but may bounce back with growth of 15% the following year. The BoE warned that the lowest point would be in the three months to the end of June.

Mr Bailey said:  “If there is any such thing as a normal recession, this one will be different. There will be elements of a faster recovery, because the first stage is literally lifting restrictions and allowing people to go out. And we see evidence of elements of that recovery starting.”

Whilst the bank’s governor did not cite any evident, real-time data used by the Office for National Statistics (ONS) has pointed to a restart in activity as consumer spending, retail sales and business trading all improved in May compared with April, The Times reports. 

In England, schools have partially reopened, many companies have adapted their businesses in line with social distancing rules and online activity has skyrocketed. From next week, all non-essential shops in England will be allowed to trade and some pubs and restaurants could reopen on July 4.

In Scotland, Tourism businesses have been told they can prepare to restart their businesses from July 15.  

However, Mr Bailey’s optimism was balanced by concerns about the slow pace of the recovery and the risk of permanent damage. He warned that consumers were likely to be cautious even after restrictions are lifted and business failures and job losses could leave economic scars.

He concluded: “We don’t know how much scarring there will be. I think it is reasonable to say there will be some, but it is very hard to judge.”

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