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“We need more evidence on coronavirus before making a policy decision,” incoming Bank of England Governor Andrew Bailey told the UK Parliament’s Treasury Committee on Wednesday.

“The equilibrium real interest rate is likely to remain low for long,” Bailey added. “We need to think of rebalancing so that fiscal policy has more of a role to play.”

GBP/USD reaction

The GBP/USD pair’s reaction was largely muted to these comments and was last seen trading at 1.2810, where it was virtually unchanged on a daily basis.

Additional takeaways

“Negative interest rates have a perverse impact on banks.”

“Negative interest rates would have a bad effect on bank competition in the UK.”

“We should not rule out coordinated action with other central banks on coronavirus, but it’s not always appropriate.”

“The BoE is already working on what tools for small businesses could look like.”