UK: More measures will be needed – ABN Amro

UK monetary and fiscal authorities announced coordinated measures to cushion the economic blow from the coronavirus outbreak but economists at ABN Amro judge that more measures will likely be needed to combat the coronavirus fallout, both on the monetary and the fiscal front.

Key quotes

“We expect the Bank of England to restart QE as its next step. Previously, we had expected this to happen in April, but with the 50bp cut coming earlier, we now expect this to happen at the 26 March scheduled MPC meeting.” 

“On the fiscal front, we judge that the government’s 2020 GDP growth projections are overly optimistic, at 1.1% (ABN AMRO: 0.8%, with downside risks), and that as the economic fallout intensifies, additional measures will become necessary.”