Less Ads, More Data, More Tools Register for FREE

BoE's Bailey warns of downside risks to UK

Thu, 8th Oct 2020 11:54

(Sharecast News) - The Governor of the Bank of England said risks to Britain's economy were "very much on the downside" and that the BoE was ready to take aggressive action to limit the impact of a resurgence in coronavirus cases.
"There is an unprecedented level of uncertainty at the moment. And the risks, I'm afraid - certainly as we see them - are very much on the downside," Bailey told an EU banking conference, according to Reuters.

The UK government is struggling to contain a new surge in Covid-19 infections with local lockdowns, prompting fears of a wider shutdown of the economy. Economists also expect a wave of unemployment after the government withdraws most of its support for jobs at the end of October and Brexit trade talks are creating further concerns.

The BoE has already cut interest rates to a record low of 0.1% and expanded its bond-buying programme to support the economy. Many economists expect the monetary policy committee to announce a further increase in bond-buying, known as quantitative easing, when it next meets in November.

"We are by no means out of firepower ... in terms of our policy tools, and we will use that firepower as appropriate, properly and strongly in response to second and third waves, where we think it is necessary," Bailey said.

Howard Archer, chief economic adviser to the EY Item Club, said Bailey's remarks were "pretty dovish". The pound was down 0.09% to $1.2907 and 0.02% to €1.0980 at 12:13 BST.

Covid-19 has combined with lack of progress on a post-Brexit trade deal to put the UK economy under extreme pressure. Bailey said the transition to life outside the EU would have been easier without Covid-19 and that a trade agreement was needed.

"Nobody benefits from protectionism in my view," he said.

Earlier on Thursday Bailey said in an interview he thought the EU and UK should be able to reach a trade deal and that the new round of Covid-19 infections probably would not be as economically damaging as the last.



More News

UPDATE 1-IMF will explore options for re-allocating reserves to raise $100 bln for poor countries

(Adds quotes)WASHINGTON, June 13 (Reuters) - The International Monetary Fund on Sunday welcomed the Group of Seven's support for expanding the global lender's emergency reserves by $650 billion and said it would work with members on ways to provid...

Today 16:58

UPDATE 1-G7 leaders agreed to coordinate China approach much more closely - Canada PM Trudeau

(Releads with fresh quotes from Trudeau about China, background)June 13 (Reuters) - Group of Seven leaders on Sunday agreed to coordinate their response to the challenges posed by China "much much more closely", Canadian Prime Minister Justin Trud...

Today 16:52

UPDATE 1-Macron says we love sausage but let's not waste time on this

(Adds quotes)CARBIS BAY, France, June 13 (Reuters) - President Emmanuel Macron on Sunday said that France respects Britain's sovereignty but it is time to end rows over sausages and focus on more serious issues.Tensions between Britain and the Eu...

Today 16:30

UK records another 7,490 COVID cases, 8 deaths

CARBIS BAY, England, June 13 (Reuters) - The United Kingdom has recorded another 7,490 daily COVID-19 cases and the deaths of 8 people who tested positive for the virus within 28 days, official data shows.The 7,490 cases was down slightly from th...

Today 16:01

Login to your account

Don't have an account? Click here to register.

Quickpicks are a member only feature

Login to your account

Don't have an account? Click here to register.