“There has been no evidence that negative rates were counterproductive to aggregate monetary policy objectives“, said on Friday the legislator of the Bank of England (BoE), Gertjan Vlieghe, as reported Reuters.
Additional comments:
“I want to emphasize how far we still have to travel in this recovery“.
“We are experiencing something between a WW-shaped recovery and a W-shaped recovery.”
“Clearly we are not experiencing a V-shaped recovery“.
“The economy seems to be able to operate at a higher level than in the first lockdown.”
“It is mainly households that are in the top 40% of the income distribution that have experienced significant increases in savings.”
“It is highly uncertain to what extent these savings will be spent once social restrictions are eased and voluntary social distancing “.
“The detailed picture of inflation that has emerged from the pandemic in recent months is difficult to interpret.”
“If the market performance deteriorates again, of course, the Monetary Policy Committee will not hesitate to accelerate the pace of purchases again“.
“But in the absence of such deterioration and with long-term interest rates already very low, we need to look for tools other than QE to offer more stimuli if necessary“.
“From the large body of evidence collected from countries that already have negative rates, I conclude that negative rates are effective“.
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