LONDON (Reuters) – Bank of England Deputy Governor Dave Ramsden said on Tuesday that positive news about COVID-19 vaccines could help to reduce the risks facing Britain’s economy but the central bank was unlikely to revise up its forecasts as a result.
Announcements over the last two weeks that two vaccines were effective in trials have raised hopes that COVID-19, which has infected 54 million people worldwide and killed 1.3 million, will be largely defeated over the coming year.
“Assuming the recent positive developments do translate into delivery of vaccinations, then they could … bolster resilience and mitigate some of the risks of long-term scarring,” Ramsden said in an online speech hosted by the University of Nottingham.
Still, Ramsden said the news on vaccines would not necessarily result in an upgrade of the BoE’s economic forecasts, since they already included an assumption that the effect of the pandemic would gradually wane.
The BoE this month increased its bond-buying stimulus plan by a further 150 billion pounds, something Ramsden said would act as a bridge for the economy.
Ramsden repeated the view from other BoE officials that while the central bank is looking at how negative interest rates might be implemented in Britain, they are not on the way imminently.
“We’re very clear at the moment … that negative rates remain in the toolbox. They’re not something that we’re taking out of the toolbox and applying to the UK at present,” Ramsden said in response to audience questions.
Echoing Governor Andrew Bailey earlier on Tuesday, Ramsden said the economy might emerge less scarred by the pandemic than following the huge shifts in the industrial makeup of Britain’s economy that took place through the 1980s and 1990s.
(Reporting by Andy Bruce; Editing by William Schomberg and Giles Elgood)
