BoE's Vlieghe: No evidence negative rates are counterproductive to aggregate aims of policy


"There has been no evidence that negative rates have been counterproductive to the aggregate aims of monetary policy," Bank of England (BoE) policymaker Gertjan Vlieghe said on Friday, per Reuters.

Additional takeaways

"Want to emphasise how far we still have to travel in this recovery."

"We are experiencing something between a swoosh-shaped recovery and a W-shaped recovery."

"We are clearly not experiencing a V-shaped recovery."

"Economy appears to be able to operate at a higher level than in the first lockdown."

"It is mostly households in the top 40% of the income distribution that have experienced marked increases in savings."

"To what extent these savings will be spent once social restrictions and voluntary social distancing are eased is highly uncertain."

"The detailed inflation picture that has emerged from the pandemic in recent months is difficult to interpret."

"Should market functioning deteriorate again, of course, the MPC will not hesitate to accelerate the buying pace again."

"But absent such deterioration and with long term interest rates already very low, we need to look for tools other than qe to deliver further stimulus if required."

"I conclude from the large amount of evidence gathered from countries that already have negative rates, that negative rates are effective."

Market reaction

The GBP/USD pair largely ignored these comments and was last seen gaining 0.2% on the day at 1.3998.

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

EUR/USD puts 1.0800 to the test

EUR/USD puts 1.0800 to the test

The strong data-driven comeback in the Greenback forced EURUSD to revisit the 1.0800 neighbourhood, down for the fourth session in a row and trading at shouting distance from the 200-day SMA (1.0787).

EUR/USD News

GBP/USD falls toward 1.2700 as USD benefits from PMI data

GBP/USD falls toward 1.2700 as USD benefits from PMI data

GBP/USD came under modest bearish pressure and declined toward 1.2700 in the second half of the day on Thursday. The US Dollar (USD) benefits from the PMI data, which showed an ongoing expansion in the private sector at an accelerating pace, and weighs on the pair.

GBP/USD News

Gold extends slide below $2,350.00

Gold extends slide below $2,350.00

Gold stays on the back foot and trades at its lowest level in over a week below $2,350. The benchmark 10-year US Treasury bond yield rises more than 1% following the stronger-than-forecast PMI data from the US, forcing XAU/USD to stretch lower.

Gold News

Ethereum reclaims $3,800, lawmakers urge SEC Chair to approve ETH ETF

Ethereum reclaims $3,800, lawmakers urge SEC Chair to approve ETH ETF

Ethereum (ETH) bounced back after a brief dip on Thursday as US lawmakers penned a letter to Securities & Exchange Commission (SEC) Chair Gary Gensler, urging him to approve spot ETH ETFs.

Read more

Is the Federal Reserve just winging it?

Is the Federal Reserve just winging it?

Are the central bankers at the Federal Reserve just winging it? It sure seems that way if you step back and take a long view of their decision-making. Fed officials project this aura of authority.

Read more

Forex MAJORS

Cryptocurrencies

Signatures