(Bloomberg) — Bank of England Governor Andrew Bailey said that the U.K. economy is learning to adapt to lockdowns to contain the coronavirus.
Speaking in a webinar, the central bank chief said the economy seemed to weather the closure in November better than it did at the start of the pandemic in early 2020.
“We have little to go on in terms of evidence on the economy so far in January,” Bailey said. But evidence suggests that “probably the impact of lockdowns in economic terms is diminishing somewhat. We all find ways to do to do economic activity by adapting. Online shopping is the obvious best example.”
Policy makers are grappling with whether Britain needs more monetary stimulus to overcome the biggest slump in three centuries. They’ll update their forecasts at the Feb. 4 decision to incorporate the new surge of Covid-19 cases and the country’s recent departure from the European Union’s single market.
Bailey said the BOE still expects a “quite pronounced” effect of the latest lockdown in the first quarter. He reiterated that the bank is reviewing the possibility of using negative interest rates, but hasn’t yet starting discussing whether to deploy them.
In a question-and-answer session, Bailey also discussed:
Negative Interest Rates
The governor said it’s important for policy makers to maintain negative interests rates as a possible option, though they’ve made no decision yet on whether to go ahead with them, partly because there’s so much uncertainty about how they’d impact the economy.
“Particularly when you go negative, the transmission is much less clear because it does change the whole calculus of how the banking system works. We do not know with any confidence how that would work. However, there are experiences of other countries,” Bailey said.
“The evidence suggests it isn’t straightforward but it can work under certain circumstances, and depending a bit on how your financial system works. We need tools in our box. We also have a very low rate of inflation. It’s still well below our target. Our challenge still remains getting inflation up to our target.”
Banking Equivalence Rules
Bailey said he’s wondering what the EU’s request for equivalence on financial services will mean for the U.K.
“It can’t seriously mean: you should never change your rules, because the world changes. Covid has illustrated that to us. If it doesn’t mean that, does it mean, ‘You should only change the rules when we the EU change our rules?’ That’s what they may mean, but … that’s unacceptable because that’s just rule-taking.”
“We cannot be in a world, particularly with as big a financial center as we have, saying: just ring us up and tell us when you change the rules and we’ll just copy them out. That’s a recipe for disaster, frankly, because our markets are different.”
Climate Change
Bailey said the bank will keep studying how climate change will impact the financial system and what policy makers can do to support environmental infinitives.
“Today we’ve seen a very big change. We now have a U.S. administration that’s going to be fully behind this. I’m very optimistic on this front at the moment. We’ve just got to get on with it now.”
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
This report by The Canadian Press was first published Sept. 13, 2024.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 172.18 points at 23,383.35.
In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.
The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.
The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.
The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.
This report by The Canadian Press was first published Sept. 12, 2024.
