BOE Measures Can Stem Long-Term Virus Harm, Bailey Writes in Sun

(Bloomberg) -- The Bank of England has launched an unprecedented package of measures to support the U.K. economy and prevent long-term economic harm from the coronavirus outbreak, Governor Andrew Bailey said in an editorial in The Sun newspaper on Saturday.

Bailey said in the column that the measures will help to keep companies running and people working as the bank seeks to provide monetary and financial stability.

“In this way, the Bank can help prevent coronavirus from causing long-lasting economic harm to Britain,” he wrote.

The bank has cut the interest rate to a record 0.1%, is injecting 200 billion pounds ($247 billion) into the economy to lower long-term borrowing costs, is supporting businesses’ access to cash and will continue to lend to households and companies, Bailey wrote in the newspaper.

The Treasury is working to support large businesses and workers by offering loans for as long as 12 months, and the bank has committed 14 billion pounds to help companies pay wages and suppliers, the governor wrote in the editorial.

The BOE will also temporarily allow lenders to hold less capital, according to Bailey. This will support as much as 190 billion pounds of bank lending to businesses, 13 times the amount it lent to businesses in 2019, the central bank governor wrote in the editorial.

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