LEADING business figures from across the North-East gathered virtually to hear a keynote speech from the Governor of the Bank of England.

Andrew Bailey spoke to 130 delegates at the digital event organised by the North East England Chamber of Commerce.

The Governor spoke about the challenges in the economy at present in the midst of uncertainty due to Covid-19 and took questions.

Mr Bailey told the leaders there will be ‘an uneven recovery’ from the pandemic.

He said: “Retail sales, for example, are not that far off their normal trading position but there is a different mix with less social consumption and more sales in areas such as DIY.

“There is also the major shift to online sales.

“The patterns of consumption have changed and the return of Covid-19 and the necessary measures will also affect the pattern of recovery.”

He added: “There are hard yards ahead.”

Questions from Chamber members were wide-ranging including whether there was the possibility of introducing negative interest rates.

Mr Bailey said it was among the potential measures and work is being done on practical issues of implementation, but this implies nothing about their use in the future.The Governor was also asked about economic forecasting. His answer was that there were three elements, the central case for the likely path of the economy and inflation, how much uncertainty there was on that path and the distribution of risk’s around it.

At present Andrew Bailey said the risks were in a range of areas, notably Covid but also disruption around the outcome in the EU trade agreement and other world events including US/China trade tensions.

These factors led to a downside risk and created uncertainty.

In response to a question on taxation he replied that it was a tool of Government policy and not under the control of the Bank of England.

To close he said: “We have a stable banking system in the UK and it is critically important at this current time so that it can provide credit and support businesses and households.”

James Ramsbotham, Chamber chief executive said: “We are extremely grateful the Governor has taken time to share his views with us at this challenging time for our economy.

"It was a tremendous opportunity for our members to ask questions about issues that are important to them, now more than ever, such as the effectiveness of Government support measures, taxation and interest rates.”

The speech was a Chamber President’s Club webinar in association with Learning Curve and the event sponsored by Pulsant.