Can we rely on a V-shaped recovery?

Can the UK expect a V-shape recovery? The Bank of England has this morning published data revealing very deep V, suggesting a complete economic recovery in a matter of months: a 25 per cent plunge in growth in Q2, followed by a 14 per cent and 11 per cent boom in Q3 and Q4. That would be the sharpest collapse in 200 years followed by the sharpest recovery in 300 years: more of a bungee jump than a V. That’s the good news. The bad news is that it’s an ‘illustrative scenario’ rather than a forecast.

The Bank’s decision to hold interest rates at (an ultra-historic low) 0.1 per cent, rather than add to its (£200 billion) programme of bond purchasing, reflects its belief that the recovery will be quick, that economic pain will be severe, but mostly fleeting. It