The Governor of the Bank of England (BoE), Andrew Bailey, in a speech prepared for TheCityUK National Conference stated that both COVID-19 and the process of establishing the future relationship with the European Union (EU) have increased uncertainty.
“In my opinion, quantitative easing at a time like this can avoid an unjustified tightening of financial conditions,” said the governor. “More funding will be needed to ensure viable businesses survive and to finance the investment need“, said.
Bailey indicated that news about vaccinations for the coronavirus will play an important role in reducing the level of uncertainty.
The BoE governor spoke about the changes in the long-term economy as a result of the pandemic. He indicated that if COVID changes in the economy persist, they could require a reallocation of labor and capital, and this reallocation could be more or less costly. He sees lasting changes coming. “We need to focus more on important questions about what our economies will be like in the future,” he added.
Market reaction
GBP / USD rose slightly on the comments and was trading above 1.3250, up more than 0.45% on the day. Most of the gains came from a weak dollar.
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