MNI BRIEF: Covid Econ Harm Lessens Hits Supply Chains: Bailey

Each wave of Covid has had a diminishing impact on the UK economy but the pandemic has added to pressures on supply chains, Bank of England Governor Andrew Bailey said when asked about the impact of the new Omicron variant. "The direct economic effects of Covid have diminished a lot," he told an Institute of Actuaries event.

Nevertheless, the Chinese approach of local lockdowns in response to Covid outbreaks has put strain on supply chains and the switch away from services "has pushed up world goods consumption," Bailey said.

His Monetary Policy Committee colleague Catherine Mann on Tuesday made the point that if the expected rotation from goods to services did not materialize because of the reaction to the new Covid variant this would be an upside pressure on inflation and Bailey's remarks echoed this point.