New BoE Governor pledges 'prompt' action to tackle economic impact of coronavirus

Andrew Bailey, the Bank of England Governor, has pledged to take “prompt action again” to tackle the economic fallout of the coronavirus outbreak, after the US Federal Reserve announced a series of sweeping measures overnight.

Bailey took over the role on Monday from his predecessor Mark Carney. In an interview with the BBC, he said strong coordination among central banks was key in dealing with the growing economic crisis, and pledged to take “prompt action again” if needed, prompting speculation that rates could be cut further. The Monetary Policy Committee held an unscheduled meeting last week and slashed the cost of borrowing to 0.25% from 0.75% in response to the coronavirus outbreak.

On Sunday night, the Fed also cut rates, lowering the target range for short-term interest rates to between 0.0% and 0.25%. In addition, it announced a $700bn stimulus programme, lowered lenders' reserve requirements and boosted dollar swap lines with foreign central banks.

Carney especially praised the boost to swap lines, which give central banks access to US dollars, “because you saw some pretty big dislocations in financial markets last week”.

He said: “We’re going to be very focused on the response to Covid.”

The focus would be on avoiding long-term damage to the UK economy, he added, noting: “That’s why you saw prompt action last week, that’s why you will see prompt action again when we need to take it, and the public can be assured of that.”

Bailey, who started his career at the Bank of England, joins from the Financial Conduct Authority, where he was chief executive.

The MPC is next scheduled to meet on 26 March.