The Bank of England will take all necessary measures to support the economy in facing the challenges posed by the spread of coronavirus, Governor Mark Carney said Tuesday.
In a statement to the Treasury Select Committee, the central banker said the coronavirus could create a “large” but ultimately a “temporary” shock to the economy.
Carney said the bank’s role is to help UK businesses and households manage through an economic shock due to the spread of the virus. The bank is closely monitoring the situation and ensures that all necessary contingency plans are in place, the outgoing BoE Governor said.
The Monetary Policy Committee is assessing the economic impacts and considering the policy implications of various possible scenarios, Carney told lawmakers.
The bank closely monitors supply disruptions and its impact on cashflow, cost and availability of finance and economic confidence, he added.
On Monday, governors of the Bank of Japan and the European Central Bank released statements ensuring appropriate actions to combat risks emanating from the Covid-19.
Elsewhere on Tuesday, central banks of Australia and Malaysia cut interest rates as they expect economic growth to be hurt by the Covid-19 outbreak.
“The lines of communication globally between central banks are wide open,” Carney told MPs. “It is reasonable to expect a response that reflects a combination of fiscal measures and central bank initiatives.”
Andrew Bailey will take charge as the BoE Governor after Carney steps down on March 15.
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