FOREX

BoE Saunders: Safer to err on the side of easing somewhat too much

BoE policymaker Michael Saunders, a known dove, warned of the risks of a “vicious circle whereby the economy gets stuck in a self-feeding loop of weak activity, pessimistic expectations and low investment.”

“The searing experience of such a dramatic drop in incomes, jobs and profits is likely to have lasting behavioural effects, as after previous crises,” he said.

He maintained he dovish stance and urged, “it is safer to err on the side of easing somewhat too much, and then if necessary tighten as capacity pressures eventually build, rather than ease too little and find the economy gets stuck in a low inflation rut.”

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