Bank of England Governor Andrew Bailey today said the Old Lady had more firepower to handle the “downside” risks faced by the economy as the country eyes a second wave of Covid-19.
In an online webinar put on by the Single Resolution Board Conference, he added that the UK’s recovery had been uneven with sectors moving at different speeds.
He said: “We are by no means out of firepower, not out of luck, in terms of our policy tools. And we will use that firepower, as appropriate, promptly and strongly in response to segments in ways where we think it is necessary and appropriate to do so.
“There is an unprecedented level of uncertainty at the moment. And the risks, I’m afraid - certainly as we see them - are very much on the downside.”
It comes as he also told the Yorkshire Post that the UK and EU should be able to reach a trade deal despite both sides showing increased brinkmanship.
Bailey took aim at European leaders, saying it was as much in their interest to find a solution to current negotiations.
In the interview published this morning he said: “I do think it is in the interests of both sides - let’s be blunt - to get an agreement.
“I’m surprised that the EU wants to restrict where their citizens can do business. We will certainly keep our markets open to the world.”
The central banker reiterated that he would like to see the UK and the bloc retain equivalent standards in financial services regulation, but said it would be wrong for the country to continue to follow EU rules it had no control over.
Yesterday Cabinet Office minister Michael Gove said that the UK and EU would reach a deal before post-Brexit transition arrangements expire at the end of this year.
Bailey also said that the rising number of coronavirus cases in Britain was likely to hurt the economy, though less badly as the initial surge earlier this year, which led to a 20% fall in output in the three months to June.
