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“I think we will see a continuation of greater consumer caution,” Bank of England (BoE) Governor Andrew Bailey said on Tuesday, as reported by Reuters.

Additional takeaways

“Latest COVID restrictions are not comparable in economic effect with what we saw earlier this year.”

“I do not expect anything like the economic hit we saw in spring.”

“Critically important that the BoE’s can use all its tools to support the economy.”

“BoE is not out of ammunition on QE, can also use forward guidance.”

“Negative interest rates are in the BoE’s toolbox, have not reached judgement on whether or when to use them.”

“We do not rule out using negative interest rates but are realistic about challenges from banking retail deposits.”

Market reaction

The GBP/USD pair edged lower after these comments and was last seen trading at 1.2843, where it was still up 0.12% on the day.