Market towns faring better during crisis than cities - Bank of England chief

Yorkshire’s market towns have fared better than its city centres during the Covid-19 crisis with the British economy set to take on a different complexion when the pandemic subsides, a leading figure at the Bank of England has said.

Dave Ramsden, the deputy governor of the Bank of England and who sits on its Monetary Policy Committee, Financial Policy Committee and Prudential Regulation Committee, said places where people normal expect to commute from to larger conurbations had enjoyed more activity than city centres as the lockdowns and restrictions led to people shopping and spending their money locally.

Speaking to The Yorkshire Post during a virtual visit to the region, Mr Ramsden said while this was encouraging for market towns which tend to be home to more independent businesses, it was too early to say whether this change in consumer attitude would persist beyond Covid-19.

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And Mr Ramsden, a former chief economic adviser to the Treasury, also tipped city centres to bounce back strongly once coronavirus is brought under control.

Dave Ramsden, Bank of England.

He said: “City centres are quite quiet. But market towns, as I understand it from what I have learnt today around Yorkshire, are doing better. The places where people used to commute from into places like Leeds are doing rather better.

“I think there will be those kinds of changes. The question is how will that look for example in Yorkshire. It is currently too early to tell.”

He added: “You will see city centres recover. Students are already back in Leeds. There is a lot of international students that are signed up to come back in a year.”

Mr Ramsden said, provided the Government’s road map to re-opening the economy went according to schedule, there would likely be a sharp rise in people in the UK seeking to holiday in Yorkshire from late spring onwards.

Cities doing less well than market towns?

But he warned that the loss of international tourism could temper any potential boom for the sector, which has spent much of the past 12 months either completely closed or severely limited.

A keen cyclist, Mr Ramsden attended the 2014 Grand Départ of the Tour de France in the region and has cycled one of the stages of the Tour de Yorkshire route from 2017.

“I am very conscious of that kind of reliance of the tourism section,” he said.

He added: “I think there will be lots of staycations happening in Yorkshire, presuming the road map to the economy opening up continues.

Bedale at Christmas time.

“But how much international tourism will there be, which I know in the past has been important to Yorkshire.”

Mr Ramsden added that the current downturn was markedly different from that seen during the financial crisis in that banks are far better funded now than they were in 2009, but warned that the these institutions needed to keep lending to help firms recover.

“The position there was that the major banks were part of the problem,” he said.

“We had a major slowdown which was intensified because they stopped lending money because they had their own funding challenges and they didn’t have enough capital.

“It is very important that banks keep lending to viable businesses so that those businesses bridge through these challenging times so that they survive them and can grow through the recovery.”