Market news
08.03.2021, 10:21

BOE governor Bailey: For now, risks remain tilted to the downside

  • UK faces two-sided risks to economic recovery, but those risks are declining as time goes by

  • Toolkit decisions should not be interpreted about signal of future policy path

  • Negative rates contingency planning implies nothing about our intentions in that direction

  • Contingency planning for negative rates does not imply it is our chosen policy tool

  • QE is set to run its course at the end of the year

  • Covid has been both a demand and supply shock to the economy, and the recovery, therefore, has to be in both elements. Absent a dual recovery, dealing with the issues that arise will be more difficult.

  • Longer-term scarring damage to the economy will be more limited than in some past recessions, but there will most likely be structural change

  • Important to boost supply capacity to raise the sustainable rate of growth.”

  • Important to emphasize the role of the forward guidance that the MPC has adopted, and the announcements made a month ago on so-called toolbox issues.

  • Far from clear whether or to what degree changes to the economy during covid will persist post-covid and therefore what will be the longer-term impact on the economy.

  • My best guess is we will see some persistence of structural changes of the economy under covid, not full persistence but not a full reversion to pre-covid either.

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