16th April 2020 By David Barwick – LONDON (EconoStream) – The Bank of England is prepared to take additional measures to counter the fallout from the pandemic, Silvana Tenreyro, External Member of the BOE’s Monetary Policy Committee, said on Thursday. At an online webinar, Tenreyro, according to a text of her remarks made available by the BOE, stressed the importance of keeping inflation expectations anchored. Working closely with other policy arms of the BOE and the government, the MPC would “do whatever it can to minimise the economic disruption that the crisis could cause for households, businesses and financial markets,” she said. “Consistent with our remit, we will continue to set policy in order to achieve price stability and anchored inflation expectations.” The MPC “remains ready to take whatever further actions are necessary,” she said. Although many aspects of the current situation, including previously subdued price developments, would act to depress inflation, it is “conceivable that some large changes in relative prices affect inflation in the other direction,” she said. The depreciation of the currency and looser fiscal policy would also tend to boost prices, she noted. “As it did in the past, if there were an overshoot, the MPC would need to assess the speed with which to return inflation to target, within the flexible inflation targeting framework it operates,” she said. The ability to pursue such a strategy lies in anchoring inflation expectations near the Bank’s 2% target, she said. “In order to meet our target it will be crucial to keep these expectations anchored.” Tenreyro said that the ongoing economic fallout would inevitably include a drop in employment; first-order output declines followed by income losses and higher uncertainty in less directly affected sectors; weaker trade and investment; decreased labor productivity; and depressed housing market activity. “The data we have so far suggest that the drop in aggregate spending already taking place will be extremely large,” she said.