, Columnists
The Bank of England Has a Transmission Problem
Until the economic fog clears, the best thing the central bank can do is continue to act “big and fast.”
City of London braces itself.
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The Bank of England met on Thursday against the backdrop of a newly imposed lockdown that’s designed to curb the spread of the coronavirus, but will also crimp the U.K. economy. For lenders who were already nervous about borrowers being unable to pay their debts, the prospect of a second collapse in growth will prompt them to rein in their support even further.
The central bank’s most recent survey of credit conditions, conducted Sept. 1-18 and published in mid-October, showed lenders anticipating a surge in mortgage defaults this quarter after years of stability.