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“There has been no evidence that negative rates have been counterproductive to the aggregate aims of monetary policy,” Bank of England (BoE) policymaker Gertjan Vlieghe said on Friday, per Reuters.
Additional takeaways
“Want to emphasise how far we still have to travel in this recovery.”
“We are experiencing something between a swoosh-shaped recovery and a W-shaped recovery.”
“We are clearly not experiencing a V-shaped recovery.”
“Economy appears to be able to operate at a higher level than in the first lockdown.”
“It is mostly households in the top 40% of the income distribution that have experienced marked increases in savings.”
“To what extent these savings will be spent once social restrictions and voluntary social distancing are eased is highly uncertain.”
“The detailed inflation picture that has emerged from the pandemic in recent months is difficult to interpret.”
“Should market functioning deteriorate again, of course, the MPC will not hesitate to accelerate the buying pace again.”
“But absent such deterioration and with long term interest rates already very low, we need to look for tools other than qe to deliver further stimulus if required.”
“I conclude from the large amount of evidence gathered from countries that already have negative rates, that negative rates are effective.”
Market reaction
The GBP/USD pair largely ignored these comments and was last seen gaining 0.2% on the day at 1.3998.