Bank of England boss: Don't fire people because of pandemic
On Tuesday, Chancellor Rishi Sunak responded with a £350bn stimulus package to support struggling firms, including £330bn of business loan guarantees.
Asked if the loan subsidies were available even to those companies that had already fired people, Mr Bailey told the BBC:"I would emphasise the point that it's critical that we support the needs of the people in the country." The message, he said, was that"supporting the employment and income of the people in this country is critical".The governor, who took over from Mark Carney this week, said that the Bank does not have the powers to stop businesses paying bonuses and dividends after receipt of subsidised loans.The support given to the economy in terms of tax cuts and extra spending is likely to see sharply increased deficits.
Mr Bailey said he was not going to foreshadow the meeting, and that the Bank was an independent institution, but the country had a right to expect that it would work"in a very closely co-ordinated way with the government".The governor said it was his"strong preference" that financial markets, which have seen huge moves in recent weeks, should stay open though he was keeping"a very close eye on the stability of markets and their integrity".
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