UK economy might take years to recover from COVID hit-BoE's Vlieghe

FILE PHOTO: Bank of England Monetary Policy Committee Member, Gertjan Vlieghe speaks during a Reuters Newsmaker event in London, Britain July 12, 2019. REUTERS/Henry Nicholls

LONDON (Reuters) - Bank of England interest-rate setter Gertjan Vlieghe said there was a material risk that it could take several years for Britain’s economy to return to full capacity after its coronavirus shock.

Vlieghe said in an annual report to lawmakers that some sectors might not be able to return to their pre-pandemic size, leading to a reorientation of the economy.

“Based on these considerations, there is a material risk in my view that it could take several years for the economy to return to full capacity and inflation to return sustainably to target, even with monetary policy at its current settings,” he said in the report.

The BoE said in August it expected Britain’s economy to recovery its pre-COVID-19 size by the end of next year.

Writing by William Schomberg, Editing by Paul Sandle