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Bank of England (BoE) Deputy Governor Ben Broadbent said on Tuesday that the coronavirus pandemic has depressed inflation by a bit less than they anticipated when it began, as reported by Reuters.

Additional takeaways

“Huge jump in government debt shielded household income from the drop in national income seen in the first half of last year.”

“Spending by today’s consumers has in part been sustained and funded by tomorrow’s taxpayers.”

“Spending on consumer services has been extremely weak.”

“Cutting back on these activities doesn’t necessarily mean a similar decline in total consumption.”

“COVID consumption consequences for cost pressures over the medium term, and therefore for monetary policy, are probably limited.”

Market reaction

The GBP/USD pair showed no immediate reaction to these remarks and was last seen gaining 0.6% on the day at 1.3595.