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“We are likely to see a number of credit events and defaults,” Bank of England Monetary Policy Committee (MPC) member and Deputy Governor, Sir Jon Cunliffe, said on Tuesday. 

Commenting on the possible use of negative interest rates, “we should not draw dogmatic lines,” Cunliffe said and noted that they haven’t asked the private sector to make preparations on that. “The impact on the financial structure is a particularly acute issue,” he added.

Market reaction

The GBP/USD pair edged slightly lower from session highs on these comments and was last seen gaining 0.25% on the day at 1.2327.