Rolling coverage of the latest economic and financial news
- Latest: Bank of England governor ‘more positive’ on recovery
- Economy could reach pre-Covid level by end of 2021, Andrew Bailey says
- Bailey warns Covid has had unequal impact
- Bailey plays down risk of inflation surge
Earlier:
- Introduction: China’s economy makes solid start to 2021
- Industrial output up 35% year-on-year; retail sales climb 33%
- Investors watching US Treasury bond yields
Here’s Reuters on Andrew Bailey’s economic optimism:
“I’m now more positive but with a large dose of caution,” Bailey told the BBC.
The British economy might perform more strongly than the BoE predicted last month as households spend the savings they have accumulated during the lockdown, but there was also a risk from possible new coronavirus variants, he said.
BoE’s Bailey says now more positive on recovery but with a dose of caution https://t.co/Hhp6cuoQzY pic.twitter.com/E71vYJeNGf
Bank of England Governor Andrew Bailey said an increase in interest rates in financial markets reflects optimism that the U.K. economy will bounce back shortly. The remarks sidestep the concern that policy makers in continental Europe and parts of Asia have expressed about rising bond yields as a threat to a recovery.
It suggests the BOE’s Monetary Policy Committee will maintain its current pace of stimulus when officials announce their next decision on Thursday. “We have seen some increase in interest rates over the last month or so, as have other countries,” Bailey said Monday in an interview on British Broadcasting Corp. “Today” program on Radio 4.
Bank of England governor Andrew Bailey has said he is “not out of firepower” in defending the economy as it recovers from the pandemic.
He told the BBC he was looking at “new tools” to deal with the UK’s biggest economic shock in 300 years.
UK economy to recover to pre-Covid levels this year, says Bailey https://t.co/yxM1S6f3pu
‘I think we will see things change, because I think some habits and some practices will prove to be sustainable,’ Mr Bailey said.
‘I think there will be for many people more of a hybrid model of working at home and working in a place of work.
Work from home is here to STAY, Brits’ lockdown savings can drive booming economic recovery, says BofE chief https://t.co/5Ad6DSUtR5
Despite his optimism, Andrew Bailey insisted that the Bank is “not out of tools, we are not out of firepower” if further stimulus is needed.
Those toolbox includes one fresh, as-yet-unused implement – the possibility of cutting interest rates below zero (they’re currently just 0.1%).
Related: Negative interest rates are a possibility in UK, but far from a certainty | Larry Elliott
