MNI BRIEF: BOE Bailey: Negative Rate, QE Unwind Work Due Risks

The Covid shock has hit both supply and demand across the economy and uncertainty is high, leaving the Bank of England to work on developing both a negative rate tool and on how to unwind quantitative easing, reflecting the two-way risks, BOE Governor Andrew Bailey said at a Resolution Foundation event.

Bailey stressed that neither the work on negative rates nor on QE unwind was intended to send a signal about the direction of future policy, but instead showed a readiness to have the tools ready to move in either direction.

"These decisions are detached from our current or likely future policy decisions, but do recognise the increasingly two-sided nature of the risks we face, as we hope and expect to see the economy get over Covid," he said.