Cyprus Mail
Banking and Finance Business

BoE to step up quantitative easing if economy slows again, deputy governor says

Bank of England governor Mark Carney poses with a new polymer five pound note at Whitecross Street Market in London, Britain September 13, 2016

The Bank of England will step up on quantitative easing (QE) if the British economy slows and struggles again, Deputy Governor Dave Ramsden said in an interview published on Tuesday, adding to his previous comments that BoE has more headroom to act.

QE would accelerate if “we saw signs of (market) dysfunction,” Ramsden told The Times newspaper in an interview.

“I’m confident we’ve still got significant headroom to do more QE if we saw a much weaker recovery,” Ramsen said, adding that the central bank was prepared to do more quantitative easing, beyond the 745 billion pounds committed.

He added that he was “confident” there would be no further quarters of negative growth for UK’s economy.

“A key outcome is what happens to the labour market. Some companies are going to go under. Some jobs are going to be lost,” Ramsen said.

Last week, Britain’s central bank said it saw no immediate case to cut interest rates below zero as it warned the economy would take longer to recover from the COVID-19 slump than it previously forecast.

Unemployment is likely to almost double by the end of this year, the Bank of England said on Thursday.

The BoE cut interest rates to just 0.1% in March and expanded its bond-buying plan to almost $1 trillion.

On Thursday, its nine monetary policymakers all voted for ‘no policy changes’ as they sketched out a slow path to recovery.

Ramsden added, in an earlier interview with CNBC, that the Bank is not actively planning for negative interest rates, despite it being part of its toolbox of policy options. He also said it had not looked into the possibility of buying stocks to boost the economy, like other central banks across the globe.

“I’m not going to get into speculation about where we might be in November but we do have further headroom … We do have headroom,” Ramsden said.”


Related posts

Trump to shut off TikTok, WeChat to new US users on Sunday

Reuters News Service

UK shoppers spend more online as demand recovers

Reuters News Service

Cyprus sees prices plunge in August as consumer behaviour changes

Andrew Rosenbaum

Cyprus shows progress in IT, but still ‘one step behind’ – IT experts

Andrew Rosenbaum

Libya’s Haftar says he will lift oil blockade

Reuters News Service

Ruble steady as Russian central bank holds key rate at 4.25%

Reuters News Service