BoE's Haldane: First half of this year is likely to be very ugly for economy

The first half of 2020 is likely to be "very ugly" for the economy, Andy Haldane, the Chief Economist of the Bank of England (BoE), said on Tuesday. "The UK economy is likely to show modest contraction in the first quarter," Haldane added. 

Additional takeaways

"Q2 is likely to bring a very much sharper contraction, seen across the world."

"There are real limits to what public policy can do to offset economic effects of coronavirus containment."

"People might be reluctant to spend too vigorously or go out and socialise immediately after coronavirus restrictions are relaxed."

"Judgments on inflation are two-sided later this year."

"Talk of monetary financing, helicopter drop is misplaced, risks of the BoE losing control are hugely overblown."

"The gilt market should have confidence this is not monetary financing."

"This is simply fiscal and monetary policy coordinating to deal with a whopper of a crisis."

Market reaction

The British pound is suffering heavy losses against the greenback on Tuesday. As of writing, the GBP/USD pair was down 1.15% on the day at 1.2293.