It’s No Time for ‘Chicken Licken’ Economics, BOE’s Haldane Says

(Bloomberg) -- The Bank of England’s chief economist has called out overly negative interpretations of the U.K. recovery, saying such anxiety could become self-fulfilling and as harmful to Britons’ wellbeing as Covid-19.

Businesses and policy makers should be more balanced, Andy Haldane said in a speech Wednesday. He warned “now is not the time for the economics of Chicken Licken,” referring to a folk tale known as Chicken Little in other parts of the world, in which a bird believes the sky is falling because an acorn fell on its head.

“If the economy were sat on a psychiatrist’s sofa, the diagnosis would not be especially difficult,” Haldane said. “These are the psychological symptoms of anxiety. And collective anxiety is as contagious, and could be as damaging to our well-being, as this terrible disease.”

The surge in government borrowing is not a cause for concern, thanks to the falling costs of servicing that debt, he said. The U.K.’s public debt soared to more than 100% of economic output during the pandemic.

Government support for jobs and businesses, alongside BOE policy, will help Britain reduce its debt through economic growth, Haldane added.

“We’ve been here before and made it through by growing the economy,” he said. “And that’s the way we will make it through this time as well.”

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