Monetary stimulus remained for several quarters

Gertjan Fligy also pointed out that the problem of the virus and its effects on the economy are not over yet.

“Yes, the economy has grown rapidly, but based on the latest statistics, the recession is still far from full employment,” said Fliggy.

He noted that GDP in May was still 4.5 percent below the peak before the pandemic, in December 2019, unemployment was at the same time one percentage point higher than it was before the pandemic and 1.3 million were still being laid off in whole or in part at the end of the year. June .

Flegg also noted that the delta variant of the Covid virus continues to cause damage to the UK’s health and economy, as it is happening in the rest of the world in a way that threatens to further damage the UK economy. At the same time, several government support programs are nearing completion, including important redundancy support.

“I would like to see how the economy deals with this before we put austerity in monetary policy on top of fiscal austerity,” Gertjan Fligy said.

“For all these reasons, I think it will still be appropriate to keep the current monetary stimulus in place for at least several quarters, and possibly longer. And when austerity becomes appropriate, I suspect not much of it will be needed, given the low level of the neutral rate.