BOE’s Haskel Says He Stands Ready to Vote for More Stimulus

(Bloomberg) -- Bank of England policy maker Jonathan Haskel said he’s prepared to back more monetary support for the U.K. if necessary as he warned that the near-term risks to the economy lie to the downside.

Haskel, considered one of the more dovish members of the Monetary Policy Committee, helped lead the charge for the BOE’s previous round of stimulus. Speaking in a webinar on Monday, he said that a “material amount” of spare capacity has emerged and that he anticipates a temporary period of subdued inflation pressure.

“I stand ready to vote for more stimulus measures should they be needed,” Haskel said.

Most economists expect additional easing to be announced by the end of this year as a resurgence of the coronavirus, rising unemployment and the potential for a messy Brexit reinforce risks to the economy.

The suggestion that they may be right aligns Haskel once again with his colleague Michael Saunders, who joined the previous push for more easing. At the other end of the scale is chief economist Andy Haldane, who voted against more bond-buying in the summer and has regularly stressed the strength of the U.K.’s rebound.

Negative Rates

Haskel also signaled he’s supportive of negative interest rates as a policy tool, noting research that suggests it may have had a positive effect elsewhere. He said the impact depends on the nature of the financial system and stage of the economic cycle.

Investors are betting that the BOE will implement negative rates by August next year. Since the start of the pandemic, officials have slashed the benchmark rate to a record-low 0.1% and increased their bond-purchase target by 300 billion pounds ($389 billion).

©2020 Bloomberg L.P.