Commenting on the package of measures announced by the Bank of England today, Yael Selfin, head of macroeconomics at KPMG in the UK, said:
“While the measures announced today may provide the economy with short-term pain relief, it is now for the new Government to pick up the baton and provide the more substantive support the UK economy needs. This includes clarity on the direction and timing of future trade negotiations, on its short term fiscal plans, as well as measures to improve UK’s poor productivity performance. “Although improving productivity has posed a challenge for a while, our clients have suggested a range of actions that could better support UK performance. These have included improving regional transport links, better broadband coverage and quality, higher education attainment across UK schools, improving labour mobility through better access to housing, as well as increasing spend on R&D.
“The Bank expects further actions to follow including further interest rate cuts taking base rates to just above zero before the end of the year, though Governor Carney ruled out the possibility of rates becoming negative in the UK. This, together with some of the other measures announced, should provide some comfort to banks, pension funds and insurers that the Bank of England also has in mind the difficulties they may face in this rate environment.”
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