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“There is a risk of scarring effects on demand due to increased risk aversion,” Bank of England (BoE) policymaker Michael Saunders told the Treasury Select Committee on Monday, as reported by Reuters.

Additional takeaways

“I am worried about pandemic hangover even after vaccine rolled out.”

“There has been a big rise in corporate debt, risk of a further rise in unemployment.”

“I expect these scarring effects will weigh on the UK economy for some time.”

Market reaction

The GBP/USD pair showed little to no reaction to these comments and was last seen trading flat on the day at 1.3282.