BoE's Bailey: QE can prevent an unwarranted tightening in financial conditions

Both COVID and the process of setting the future relationship with the EU have increased uncertainty, Bank of England (BoE) Governor Andrew Bailey notes in a speech prepared for delivery at TheCityUK National Conference.

Additional takeaways as summarised by Reuters

"In my view, quantitative easing at a time like this can prevent an unwarranted tightening in financial conditions."

"We have had encouraging news on the vaccine front."

"Vaccine news will play a major role in lowering the level of uncertainty."

"More financing will be needed to ensure viable businesses survive and to finance the need for investment."

"We need to ensure that this is done without excessive leverage."

"If COVID changes to economy persist, they could require a reallocation of labour and capital, and this reallocation could be more or less costly."

"My best guess is that there will be lasting changes."

"We can now see some light at the end of the tunnel."

"We need to focus more on important questions about how our economies will look in the future."

Market reaction

The GBP/USD pair edged higher after these comments and was last seen gaining 0.45% on the day at 1.3252.