LONDON (Reuters) – Britain is likely to suffer an “extremely large” hit to spending in the economy because of the lockdown to slow the spread of the coronavirus and the Bank of England will only be able to limit some of the impact, policymaker Silvana Tenreyro said.
Tenreyro, an external member of the BoE’s Monetary Policy Committee, said the BoE remained ready to do what was needed to reduce the impact, but said monetary policy could only be a small part of the answer.
“The data we have so far suggest that the drop in aggregate spending already taking place will be extremely large,” she said in a speech text published by the BoE.
“This is partly by design: to safeguard public health and long-run prosperity, governments around the world have temporarily closed some sectors of the economy and limited consumption and production,” she added.
(Reporting by David Milliken; Editing by William Schomberg)
