BOE’s Vlieghe: Outlook for monetary policy is skewed towards adding further stimulus

The risk remains skewed towards adding more monetary stimulus, the Bank of England (BOE) policymaker Gertjan Vlieghe said on Tuesday.

However, he was quick to add that the “MPC is not yet at a point where it can reach conclusion on negative rates.”

Additional quotes

Appears downside risks are starting to materialize.

Risk that negative rates end up being counterproductive to the aims of monetary policy is low.

QE is probably less potent now than in March.

There is quite a way to go before we can say we have recovered.

Evaluating unemployment accurately during the pandemic is a phenomenal challenge.

Difficult to see a scenario where all of the remaining furloughed workers are reintegrated seamlessly into the labor force.

Risks are skewed towards even larger job losses.

Tradeoff between health and economy is much less severe than you might think.

Increased COVID-19 cases are crystallization of downside risks seen by MPC in August.

Speed of the recovery is likely to be slower while the virus prevalence remains a concern.

Indicators related to investment remain very weak indeed.

Market reaction

GBP/USD was last seen probing daily highs of 1.2979, little affected by the dovish comments from the BOE policymaker.  The spot is up 0.20% on the day.


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