Rate Cuts Aren’t Right Response to Virus, Says Ex-BOE Chief King
Rate Cuts Aren’t Right Response to Virus, Says Ex-BOE Chief King
(Bloomberg) --
Interest rate cuts and a broad fiscal spending aren’t an effective way to tackle the economic fallout from the coronavirus, according to former Bank of England Governor Mervyn King.
U.K. finance minister Rishi Sunak should instead focus on short-term measures in this week’s budget, such as cash flow support for virus-hit businesses, King said in an interview with BBC Radio 4 on Monday.
“This virus and its economic impact are not amenable easily just to cuts in interest rates or fiscal expansion,” he said. “It requires much more targeted measures.”
While there will be a significant economic cost to the outbreak, the consequences could be limited to the short term, King added.
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To contact the editors responsible for this story: Paul Gordon at pgordon6@bloomberg.net, Brian Swint, Alaa Shahine
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