Participating in a webinar discussion hosted by the Confederation of British Industry (CBI), the Bank of England (BOE) Chief Economist Andy Haldane said that the UK central bank has not reached remotely a view on doing negative interest rates yet.

Additional comments

On negative interest rates, says “key issues to consider are consequences on the financial sector, confidence in the economy. “

“UK economy probably shrank by more than 20% in Q2.”

“Surveys showing some stabilization and a very modest recovery in spending and business sentiment.”

“Data coming just a shade better than the BOE scenario. “

“Will be a period of prolonged caution by individuals and companies after lockdown lifted.”

“This is perhaps still a V-recovery but a lopsided V and risks are of protracted recovery.”

Market reaction

The above comments by Haldane seem to have doused the rally in GBP/USD, as the spot eases off the two-week highs of 1.2326 to now trade at 1.2315. The cable shot through the roof on reports of a likely Brexit breakthrough. 

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