MNI BRIEF: BOE Bailey Plays Down UK V-Shaped Recovery

Bank of England Governor Andrew Bailey told the Lords Economic Affairs Committee Wednesday that with Covid resurgent, the risks of substantial economic scarring had risen and he was dismissive of the idea that the UK could experience a V-shaped recovery.

Asked about negative rates he stressed that the Bank was only at the stage of deciding if they were a tool that would work and not if they wanted to deploy them. He noted that the European Central Bank evidence was that they supported investment, but this depends on where the economy is in the cycle, with investment rising in a strengthening economy rather than one in the eye of the storm.