June 12, 2020 / 1:54 PM / a month ago

Bank of England's Bailey says we must be ready for further stimulus

FILE PHOTO: Bank of England Governor Andrew Bailey poses for a photograph on the first day of his new role at the Central Bank in London, Britain March 16, 2020. Tolga Akmen/Pool via REUTERS/File Photo

LONDON (Reuters) - Bank of England Governor Andrew Bailey said the British central bank had to be ready to do more to help the country’s economy because of the risk of long-term damage caused by the coronavirus shutdown.

Bailey said a record fall of 20% in Britain’s gross domestic product in April, announced earlier on Friday, was close to the BoE’s expectations for the month, and he repeated his view that there had been signs of a recovery in recent data since then.

While the fall in April - when the economy spent a full month under lockdown - was dramatic, the big question was how much long-term damage this would inflict on Britain’s economy, he said.

“We hope that will be as small as possible but we have to be ready and ready to take action, not just the Bank of England but more broadly, on what we can do to offset those longer term damaging effects,” Bailey told broadcasters.

The BoE is expected to announce a fresh increase of at least 100 billion pounds in its bond-buying firepower following a policy meeting next week.

Reporting by William Schomberg, editing by David Milliken

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