Covid-19 Bounce Back loans for property businesses16:06 PM, 5th May 2020
About 3 weeks ago 46
Andy Haldane, the Bank of England’s chief economist, has told the Sunday Telegraph that negative interest rates could be considered in an effort to combat economic effects of the coronavirus lockdown measures.
Haldane indicated the Bank of England is currently reviewing a number of monetary options it could take in its response to the global pandemic. These also including expanding the scope of the bank’s asset purchase quantitative easing plan to include riskier securities, but this would unlikely be implemented imminently. However, it could be looked at with greater immediacy due to the weakening position of the UK economy.
Haldane told Bloomber: “You mention negative rates, but there are other options beyond that, or alongside that, that we’re looking at as well.”
“With QE there is more we can do there on the gilt side and the corporate bond side in principle as we’ve found from other central banks, you could purchase assets further down the risk spectrum. I don’t want to imply we’re poised on any of those but we have over a number of years been reviewing all of our options for more, if more is needed.”
The Governor of the Bank of England, Andrew Bailey, remains sceptical of negative interest rates due to their poor recent results in other countries and that it could undermine the central bank’s ability to influence borrowing costs across the economy.
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