The Bank of England (BoE) is prepared to make further emergency measures to mitigate the economic damage of the coronavirus outbreak, which sent the <a href="https://www.thenational.ae/business/money/uk-pound-hits-lowest-level-since-september-as-uae-residents-cash-in-1.994238">UK pound tumbling</a> to its lowest level against the dollar in 34 years on Wednesday. The BoE governor Andrew Bailey, who only began his job this week, was asked by Sky News if measures including cutting interest rates to zero, a huge new bond-buying scheme or even printing money to give to households were being considered. "Everything is on the table that is reasonable, within the policy tool set," Mr Bailey replied. "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." Last week the BoE cut rates to a joint record low 0.25 per cent and launched measures to encourage banks to keep lending to smaller firms. Mr Bailey said since then the impact of the virus on big businesses had become much starker as well as small and medium-sized firms that were the focus of the joint Bank-Treasury. As the crisis grew, with many sectors of Britain's economy hit by a near shutdown, the BoE said on Tuesday it would buy a form of debt called commercial paper from investment-grade companies, even if they had not issued it previously. Mr Bailey said it was not the time for financial markets to shut over the coronavirus, which has killed 71 people in the UK. "As long as we are not seeing what I would call markets that are out of control then keeping markets open is important," he said. "So far the financial system is standing up well to this." Mr Bailey told short-sellers of British assets to “just stop”. “Anybody who says, ‘I can make a load of money by shorting’, which might not be frankly in the interest of the economy or the interest of the people, just stop doing what you’re doing,” Mr Bailey told the BBC in a separate interview. Hetal Mehta, senior European economist at Legal & General Investment Management, said the current measures that the UK treasury and the Bank of England were providing was not enough. “The UK has a co-ordinated monetary and fiscal policy approach but the size of the package is still being deemed by markets as insufficient,” she told Bloomberg. “A new BOE governor only three days into the job whose monetary policy views are still largely unknown will also cause some nervousness.” Yields on 10-year British government bonds rose to their highest level since January 2020, while the FTSE 100 stock index dropped as much as 5.5 per cent. The pound dipped 2.5 per cent to $1.1758 on Wednesday. "The main reason for dollar demand is liquidity concerns as in volatile times, companies and investors need dollars to settle transactions and as long as these concerns persist, we expect the pound to remain on the back foot," strategists at UBS Wealth Management said in a note.
