BoE Deputy Governor Ben Broadbent said today that “the committee are certainly prepared to do what is necessary to meet our remit with risks still to the downside.” And, it’s “quite possible that more monetary easing will be needed over time”. But there are pros and cons of cutting interest rates further from the current 0.1% level. “These are the balanced questions the committee has to think about and … has been thinking about for the past decade,” Broadbent said.
Broadbent also rejected the idea that BoE is financing the government’s fiscal measures. “It is not surprising when you have a huge hit to the economy, as is the case now, as was the case in 2009, that you see easing on both fiscal and monetary fronts,” he said. “That is the connection — they are both responses to a weaker economy. It is not the case that one is a response to the other.”