9/4/2020, 12:20 PM (Source: TeleTrader)
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Unemployment likely to rise markedly - BoE's Saunders

Bank of England's Monetary Policy Committee member Michael Saunders warned on Friday that unemployment in the United Kingdom is likely to rise significantly "unless activity and hours worked quickly recover the lost ground." Saunders noted that the furlough scheme, which is expiring at the end of October, and companies showing weak hiring intentions, are the main indicators of pessimism.

Saunders also pointed out a number of risk factors for the UK economy going forward. The coronavirus pandemic could result in "a long period of rolling local lockdowns of varying sizes" resulting in economic uncertainty. Another issue is the trade deal with the European Union, providing "strong incentives for companies and households to defer major spending decisions." Finally, he stated that the decline of the neutral interest rate is "providing less stimulus than intended."

He concluded that the Committee is ready to adjust monetary policy, including additional monetary easing to reach a "sustained return of inflation to the 2% target."

Breaking the News / DJ