BoE examining negative rates, says Haldane

The UK is heading toward an unemployment crisis comparable to the one experienced in the early 1980s

NEW YORK • The Bank of England (BoE) is considering negative interest rates among other options to address the economic slump, the Telegraph reported, citing comments by BoE chief economist Andrew Haldane.

“It’s something we’ll need to look at — are looking at — with somewhat greater immediacy,” the Telegraph reported, citing Haldane. He said there are other options, such as expanding the bank’s bond purchases.

His comments run counter to those made during a web conference last week by governor Andrew Bailey. While saying that negative rates weren’t something being contemplated, he added it was important not to rule anything out forever.

“With quantitative easing, there are more we can do there on the gilt side and corporate bond side in principle,” Haldane said, referring to the policy of quantitative easing. “As we’ve found from other central banks, you could purchase assets further down the risk spectrum. I don’t want to imply we’re poised on any of those, but we have over a number of years been reviewing all of our options for more, if more is needed.”

Haldane said the UK is heading toward an unemployment crisis comparable to the one experienced in the early 1980s.

Meanwhile, Boris Johnson said Britain may not be free of the coronavirus “for some time to come”, an admission that high- lights the difficult task he has of convincing people to return to work as the nation’s death toll from Covid-19 remains the highest in Europe.

In an op-ed article for The Mail yesterday, Johnson said his government will spend £93 million (RM491.55 million) on a vaccine research centre in Oxfordshire and the site will open in summer 2021, a year ahead of schedule.

Wealthier governments are manoeuvring to get first rights on potential vaccines — Covid-19 has killed more than 310,000 people globally, upended the way people go about their daily lives, and cratered economies.

Johnson’s article — much of it a One Nation-style rallying cry that referred to the “good sense of the British people” — sought to draw a line under one of the more chaotic few days of his premiership follow- ing his televised address to the nation last weekend. He dropped the “stay at home” message for “stay alert”, a shift that left many Britons confused as to what they were allowed to do outside, and whether they should risk returning to work. — Bloomberg