BoE Haldane: Hopes furloughs continue to ‘keep a lid on unemployment’


Bank of England’s Chief Economist Andy Haldane says the bounce back from Covid may be sharper than the financial crisis.

Says hopes furloughs continue to ‘keep a lid on unemployment’.

In proper comments, Haldane said the central bank is prepared to let inflation overshoot its 2% target temporarily but any overshoot could not become entrenched.

he fears that bond yields would rise, pushing up the cost of repayments on Britain’s 2 trillion-pound debt mountain and jeopardising any recovery.

He also said he was much more confident about the economy in the second half of 2021 than in the first quarter of the year.

Key notes

Haldane says ''I would not expect further losses of jobs if the furlough scheme is tapered off when the economy is 5-10% smaller than pre-covid level.''

Haldane says he hopes that economic recovery will be "at a rate of knots" from Q2.

Haldane says ''I am concerned that some people perceive monetary policy as being driven by government fiscal needs, this is not the case.''

Haldane says if monetary tightening is needed we will take those actions needed to meet our inflation target.

Haldane says it was "absolutely necessary" for the UK government to increase borrowing.

Haldane says debt levels above 100% of GDP are not unprecedented of UK.

Haldane says the cost of servicing government debt has never been lower.

Haldane says we are not facing any impending fiscal problem or funding strike.

Haldane says when the time comes to reverse QE, BoE will do so in a gradual fashion.

GBP/USD update

GBP/USD holds above the 1.3600 level, pulling away from the highs of the day 13628.

GBP/USD crawls back above 1.3600 as US dollar demand fades

 

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