By Reuters Staff
1 Min Read
LONDON, Feb 19 (Reuters) - The Bank of England might need to cut interest rates below zero later this year or in 2022 if the economic recovery disappoints, and especially if there is persistent unemployment, policymaker Gertjan Vlieghe said on Friday.
Vlieghe said his central scenario was that the BoE would not need to loosen policy if the recovery took place as forecast by the central bank earlier this month, but that there was a risk of lasting labour market weakness depressing wages and prices.
“In such a scenario, I judge more monetary stimulus would be appropriate, and I would favour a negative Bank Rate as the tool to implement the stimulus,” he said in a speech published by the BoE.
New York Federal Reserve President John Williams said on Friday he's not worried the economy will overheat due to government overspending, adding that employment and inflation are far below levels that would prompt the U.S. central bank to dial back its own support.
The risks of ongoing business failures in the United States "remain considerable" even as the economy emerges from the coronavirus pandemic, the Federal Reserve said on Friday in its semi-annual monetary policy report to Congress.
A record rush to big technology stocks saw equity funds bagging $27.8 billion inflows last week with the ongoing ultra-easy monetary policy creating the "mother-of-all asset bubbles", BofA said on Friday.