Coronavirus: Bank of England considers printing money for households

The new Bank of England Governor Andrew Bailey poses for a photograph on the first day of his new role at the central bank in London, Monday March 16, 2020. Andrew Bailey is replacing Mark Carney. (Tolga Akmen/Pool via AP)
Andrew Bailey began his term as Bank of England governor on Monday. (Tolga Akmen/Pool via AP)

Bank of England governor Andrew Bailey on Wednesday, 18 March, suggested that the central bank was considering printing money and giving it directly to UK households, noting that “everything is on the table.”

Bailey, who began his term as governor on Monday, said that the Bank of England would “do what it takes to meet the needs of the economy and the needs of the people of this country.”

Responding to a question in a Sky News interview about the measures that the bank was considering — such as cutting interest rates to zero, and even printing money to give directly to households — Bailey said: “Everything is on the table that is reasonable, within the policy toolset.”

"We have a very large toolkit,” he said. “I don't rule anything out, frankly, but please don't therefore interpret it that we're about to do it either.”

Read more: European stocks fall as coronavirus stimulus packages fail to calm investors

“I think nobody in their right mind in my role would say, ‘well, you know the following things I would never do’ — because that's foolish.”

Speaking to reporters on Wednesday, Bailey also suggested that the Bank of England was willing to pump unlimited quantities of money into the economy using its new commercial paper facility.

The scheme, which was announced by chancellor Rishi Sunak on Tuesday, aims to help businesses across a range of sectors to pay wages and suppliers.

“You know the thing that was announced yesterday is in many ways was quite a large step forward in terms of the operations the Bank of England does, because we haven't set any limit,” Bailey said.

“We will meet the needs of the economy.”

Sunak on Tuesday also announced a further £20bn in stimulus measures — on top of those announced in last week’s budget — and an additional £330bn in government-backed loans for businesses, equivalent to 15% of GDP.

Read more: European stocks fall as coronavirus stimulus packages fail to calm investors

Last week, the Bank of England cut its benchmark interest rate by 50 basis points, to just 0.25%, leaving little room for a further cut.

In the US, Treasury secretary Steven Mnuchin on Tuesday said that the Trump administration wanted to send direct cash payments to Americans to help them cope with the economic fallout of coronavirus.

Mnuchin told reporters that the administration is discussing as much as $1.2tn (£960bn) in stimulus measures, which could involve direct payments of $1,000 (£800) to Americans within the next two weeks.