Policymakers start to withdraw support

August marks the beginning of the phasing out of the extraordinary policy support that has seen the economy through the coronavirus crisis so far. The winding down of the furlough scheme while economic activity is still well below pre-virus levels will inevitably result in the small fall in employment so far turning into a much bigger one . And the resurgence of the virus in Spain and parts of the North of England highlights the risk that more severe and widespread outbreaks and restrictions cause the recovery to stall or, in the worst-case scenario, the economy to endure a double-dip recession.