The Bank of England (BoE) will consider adjusting the levels of quantitative easing (QE) before it decides on raising interest rates, governor Andrew Bailey said.
In an opinion piece for Bloomberg, Bailey wrote: “When the time comes to withdraw monetary stimulus, in my opinion it may be better to consider adjusting the level of reserves first without waiting to raise interest rates on a sustained basis.”
The base rate was held at its record low level of 0.1 per cent last week and the central bank injected another £100bn QE into the economy taking the stock of asset purchases to £745bn.
In the piece, Bailey said the bank’s response was the right thing to do but warned the financial system should not become reliant on the “extraordinary levels” of reserves.
“The role of central bank reserves shouldn’t always be taken for granted.
“Rather than having to keep relying on central bank support for all aspects of the financial system, we need a robust assessment of the latter’s weaknesses,” he wrote.
“As economies recover, it’s likely that some of the exceptional monetary stimulus will need to be withdrawn, including by reducing reserves.”
Shekina is the deputy editor at Mortgage Solutions and commercial editor at Mortgage Solutions and Specialist Lending Solutions. She has nearly eight years of experience in the B2B publishing market, having previously covered the hospitality, retail, pet, accounting and jewellery sectors.
Shekina has worked for Mortgage Solutions and Specialist Lending Solutions for almost five years. Here, she covers the market’s breaking news stories, engages with professionals in the sector, and oversees any commercially agreed content in partnership with mortgage-related companies.
This includes presenting webinars and hosting roundtable discussions on developing themes in the mortgage sector.
She is an NCTJ-trained journalist and was nominated for the Headline Money Awards Mortgage Journalist of the Year in 2021.
In her spare time, Shekina likes to read, travel, listen to music and socialise with friends.
She currently reports on current events in the mortgage market and liaises with financial clients to produce sponsored content.
Follow her on Twitter at @ShekinaMS
