The coronavirus pandemic hit the economy hard with GDP falling by 20 per cent in the three months to June.
Economic output at the end of the third quarter of this year is now set to be 10 per cent lower than the end of 2019 as a result of the crisis, the central bank chief (pictured) said.
According to the BBC, Bailey told an online event for central banks on Sunday: “Of course, that is heightened now by the return of Covid… the risks remain very heavily skewed towards the downside.”
Policymakers should act aggressively to help protect the economy, he added, and referenced the ongoing debate over negative interest rates.
According to the BBC, Bailey said: “Our assessment of negative interest rates, from the experience elsewhere, is that they probably appear to work better in a more wholesale financial market context, and probably better in a nascent economic upturn.”