The Times has cited the Bank of England (BOE)’s outgoing and incoming governors as saying that the BOE has “not run out of ammunition” to combat a serious economic shock amid the ongoing coronavirus (COVID-19) outbreak.
Andrew Bailey, who enters office on 16 March, said that recently slashing interest rates to 0.25 percent, the BOE had used up “just under half” of its policy-related potential.
BOE’s outgoing head Mark Carney, for his part, touted the bank’s new hefty aid package as something that aims to ease “an economic shock that could prove large and sharp, but should be temporary”.
Their remarks came after the BOE cut its main interest rate to a record low on Wednesday as part of emergency measures to respond to the economic fallout from the coronavirus.
The bank said in a statement that slashing the rates would “help to keep firms in business and people in jobs and help prevent a temporary disruption from causing longer-lasting economic harm”.
Shortly afterward, British Finance Minister Rishi Sunak vowed to do "whatever it takes" to protect the national economy, announcing £30 billion ($39 billion) in tax breaks and additional spending, including targeted coronavirus relief steps worth about £12 billion ($15.5 billion).
The promise was preceded by the BOE’s statement last week that the Bank is closely cooperating with HM Treasury and the Financial Conduct Authority (FCA) - as well as its international partners – “to ensure all necessary steps are taken to protect financial and monetary stability” amid the ongoing coronavirus outbreak.
Currently, there are 382 confirmed cases of the COVID-19 in the UK, including one related to the country’s Health Minister Nadine Dorries. The outbreak has already claimed the lives of at least eight Britons.