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Bank of England (BoE) Governor Andrew Bailey said on Tuesday that they are not there yet when it comes to deciding whether to use negative interest rates, as reported by Reuters.

Additional takeaways

“One thing we have learned from COVID is to consider what is in the toolbox.”

“In a world of very low equilibrium policy rates, there is a much more important role for QE.”

“Some evidence suggests some elements of QE is contingent on the state of economy and markets.”

“QE will remain part of our toolkit for time to come.”

“If we carry on with QE as we did earlier this year, it does pose questions about the BoE’s balance sheet.”

“I think there is a case to manage the BoE balance sheet down during upturns.”

“We are not out of firepower at all.”

Market reaction

The GBP/USD pair remains depressed near 1.2980 following these comments, losing more than 0.6% on a daily basis.