“The outlook is positive but with large doses of cautious realism“said the Governor of the Bank of England (BoE), Andrew Bailey, in a webinar organized by the Resolution Foundation. His speech is titled” The economic perspective “.
Additional comments:
“The Covid has been a shock to both supply and demand for the economy and therefore recovery must occur in both elements.
“In the absence of a dual recovery, it will be more difficult to deal with problems that arise“.
“The healing of long-term damage to the economy will be more limited than in some past recessions, but most likely there is a structural change“.
“It is important to boost supply capacity to increase the sustainable growth rate.”
“It is important to emphasize the role of the future direction that the MPC has adopted and the announcements made a month ago on the so-called toolbox problems.”
“We recognize the increasingly bilateral nature of the risks we face.”
“Toolkit decisions should not be construed as a signal on the future trajectory of monetary policy “.
“The contingency planning for negative rates does not imply anything about our intentions in that direction“.
“Nor does it imply that negative rates are our chosen marginal policy tool, something that, in my opinion, depends on the state at all times.”
“It is not clear if the changes in the economy during the covid will persist after the covid or to what extent and therefore what the long-term impact on the economy will be.”
“My best prediction is that we will see some persistence of the structural changes in the economy under COVID, not full persistence, but not a full reversion to pre-covid either.”
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