MNI BRIEF: BOE Tenreyro Sees Disinflationary Covid Hit

Although the Covid-19 shock has thrown up a high degree of uncertainty with upside inflationary pressure from disrupted supply chains, but the rapid growth of online retail would likely result in long-run disinflationary effects, Bank of England Monetary Policy Committee member Silvana Tenreyro said Wednesday.

She also noted the evidence of disinflationary effects from pandemics, saying they "in general tend to reduce R star, or the equilibrium interest rate. If Covid 19 has the same effect it would imply lower levels of interest rates than before would be consistent with meeting the inflation target."