BoE's Vlieghe Sees Need For More Stimulus As Pandemic Poses Downside Risks
20 Octubre 2020 - 3:44AM
RTTF2
Bank of England policymaker Gertjan Vlieghe said additional
monetary stimulus is needed as the coronavirus pandemic poses
downside risks to the economy.
It appears that the downside risks to the economic outlook are
starting to materialize, he said in a speech on Tuesday. "The
outlook for monetary policy is skewed towards adding further
stimulus."
He observed that the speed of the recovery is likely to be
slower while the virus prevalence remains a concern, with risks of
a higher and/or more prolonged trajectory of job losses.
Since the negative interest rate has not been tried in the UK,
there is uncertainty about its effectiveness, and the monetary
policy committee is not at a point yet when it can reach a
conclusion on this issue, the banker said.
According to Vlieghe, the risk that negative rates end up being
counterproductive to the aims of monetary policy is low.
Although additional asset purchases remain an available policy
tool, the effects of quantitative easing are state-dependent, and
that a key channel through which QE works is by affecting expected
future real interest rates, which are already very low, Vlieghe
noted.
The economy is going through a process of unprecedented
reallocation across sectors. The scale and persistence of the
reallocation associated with both the pandemic and with Brexit, is
likely to weigh on employment and investment.
The risks to the economic outlook are skewed towards a longer
period of labour market slack with weak inflationary pressure.
Sterling vs US Dollar (FX:GBPUSD)
Gráfica de Divisa
De Mar 2024 a Abr 2024
Sterling vs US Dollar (FX:GBPUSD)
Gráfica de Divisa
De Abr 2023 a Abr 2024