© Reuters. FILE PHOTO: A person walks past the Bank of England in the City of London financial district, in London, Britain, June 11, 2021. REUTERS/Henry Nicholls
LONDON (Reuters) – Managing nearly a trillion pounds ($1.4 trillion) of British government bond purchases will be one of the Bank of England’s biggest challenges in the aftermath of the COVID-19 pandemic, Governor Andrew Bailey said on Monday.
“That is substantially bigger than the Bank of England balance sheet in the past,” Bailey told an online conference hosted by the Association of Corporate Treasurers.
“It’s necessary, it’s been done for a very, very good reason, but we have to think hard about how we manage that…. That is going to be a major issue for us.”
The BoE doubled its bond purchase target to 895 billion pounds last year to cushion the British economy against its biggest contraction in 300 years, after the economy went into lockdown in March to slow the spread of COVID-19.
The economy has since begun bouncing back but remains about 4% below its pre-pandemic size.
($1 = 0.7085 pounds)
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