BOE’s Broadbent Has Just Woken Up on Coronavirus World
The coronavirus outbreak has hit the demand side of markets, with people locking themselves in homes and large parts of the economy shutting down in Europe, North America and in most of the world for that matter. It’s a no brainer that the demand side has been hit; if people stay locked inside, then large parts of the service industry will suffer.
The Bank of England has taken steps to fight the economic impact, but it seems like the Bank of England member Ben Broadbent has just woken up in coronavirus world, because he is just realizing that. Below are some of his main comments which he made a while ago:
- Coronavirus crisis is quite unlike a normal cyclical downturn
- Hard to think distinctly about the hit to demand, supply
- Sees ‘powerful demand effects’ as a result of the virus impact
- BOE stimulus designed so that hit to demand does not outstrip that to supply
- Size of virus hit is ‘very, very material’
Some token remarks there by Broadbent. Nothing that really stands out from the above. But best be sure that if liquidity strains start cropping up more persistently, one can expect the BOE and other central banks to step in once again. GBP/USD remains quite uncertain now as it was last week, but the highs are getting lower so the pressure is turning to the downside.
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