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Bank of England Governor Bailey on Wednesday said measures such as ‘helicopter money’ were fiscal and would be for the government to decide. Regarding the GBP’s sharp drop, “we watch sterling very carefully, we will take note of recent fall and consider effects closely at the next MPC meeting,” Bailey noted.

Bailey further acknowledged that there was a huge amount of uncertainty about the economic outlook and said that working on a ‘best estimate’ was a challenge.

GBP/USD reaction

The GBP/USD pair seems to have steadied near the 1.1850 handle on these remarks but was still down 1.7% on the day.

Key takeaways

“Effect of coronavirus on big companies has become much starker since last week’s rate cut.”

“So far, the financial system is standing up well to coronavirus.”

“Keeping markets open is important, UK markets are not out of control.”

“Global central bank liquidity steps on Sunday have helped calm some markets.”