BBC :
The Governor of the Bank of England has backed the government’s decision to end its furlough scheme in October.
Andrew Bailey told the BBC it was important that policymakers helped workers “move forward” and not keep them in unproductive jobs.
He said coronavirus would inevitably mean that some jobs became redundant.
The Bank also predicted the economic slump caused by Covid-19 will be less severe than expected, but warned the recovery will also take longer.
More than nine million jobs have been furloughed under the government’s job retention scheme, but the Bank expects most people to go back to work as the economy recovers.
Trade unions have urged Chancellor Rishi Sunak to extend the scheme, which pays a share of workers’ wages, to avoid mass job losses.
However, Mr Bailey said it was right to focus on helping people to find new jobs.
“It’s been a very successful scheme, but he’s right to say we have to look forward now,” he said. “I don’t think we should be locking the economy down in a state that it pre-existed in.”
The Bank said a faster easing of lockdown measures and a “more rapid” pick-up in consumer spending had helped the economy rebound faster than it had assumed in May.
Its latest Monetary Policy Report showed spending on clothing and household goods were back to pre-Covid levels.
However, the Bank warned of a “material” rise in unemployment this year as it held interest rates at 0.1%.
Mr Bailey said recent data suggested the recovery in consumer spending was gaining traction, while spending on food and energy bills remained above pre-Covid levels.
He said: “We have had a strong recovery in the last few months. The pace puts the economy ahead of where we thought it would be in May.”
However, Mr Bailey cautioned against reading too much into recent figures: “We don’t think the recent past is necessarily a good guide to the immediate future,” he said.
The Bank said spending on leisure and entertainment, which accounts for a fifth of all consumer spending, remained subdued.
Business investment was also weak, which would weigh on the recovery.
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