You are here: Home - News -

BoE will adjust QE before raising interest rates – Bailey

by:
  • 23/06/2020
  • 0
BoE will adjust QE before raising interest rates – Bailey
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“As economies recover, it’s likely that some of the exceptional monetary stimulus will need to be withdrawn, including by reducing reserves.”

 

There are 0 Comment(s)

You may also be interested in

Privacy Preference Center

Read previous post:
Liam Brooke, CEO of Lendy
Ex-Lendy bosses see assets frozen over £6.8m offshore payments

Former Lendy bosses Liam Brooke and Tim Gordon have had their global assets frozen following legal action from the administrators...

Close