COVID-19: About 2.2 million unemployed in ‘very difficult period’ for economy, says Bank of England governor

Andrew Bailey talks unemployment and negative interest rates at a Scottish Chambers of Commerce event.

The governor of the Bank of England believes the UK’s jobless rate has climbed to around 6.5% – higher than official figures suggest – as the coronavirus pandemic continues to wreak havoc on the economy.

In a speech to business leaders at a virtual event in Scotland, Andrew Bailey was also guarded on whether negative interest rates could be deployed to help boost growth following the latest COVID-19 lockdowns amid economists’ warnings the UK is heading for a double-dip recession.

His 6.5% estimate for the unemployment rate equates to around 2.2 million people, though there is uncertainty surrounding the number because of shifts in those deemed economically inactive.

The latest official figure for the rate stands at 4.9% but covers only up to the three months to October.

Andrew Bailey became governor of the Bank of England just before the original COVID lockdown in March 2020

Mr Bailey told the Scottish Chambers of Commerce that the extension of the Treasury’s Job Retention Scheme since the Bank’s last major forecasts would mean that its predicted 7.5%-8% jobless peak would be missed this year.