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developing story ….

Key quotes

Initial fall in the UK and global activity was less sharp than BOE feared in May

How the UK economy develops will depend on how pandemic evolves, policy response and response from households and businesses

 Sees effective lower bound still at 0.1%

BOE’s central case sees GDP recovering steadily, but there are real uncertainties and risks

If you have negative rates in the toolbox, you are duty bound to explore in more detail the operational considerations

Sees risks from COVID-19, US election, Brexit

He is particularly focused on labor market

We are not about to use negative rates imminently

We will need to factor Sunak’s changes to the UK job support into November forecasts

Engagement with banks on negative rates will take time

Our central case sees unemployment picking up “really sharply” this year

We also have QE programme currently in flight

Clear that risks to growth are to downside

More likely unemployment will peak above 7.5% than below, be slower to fall