The United Kingdom's Office for Budget Responsibility, Charlie Bean said on Tuesday that he doesn't think that a cash rate cut would aid Britain's economy in the short run, instead, the government should focus on implementing credit measures.
During a speech he gave to the British lawmakers in the parliament, Bean said that there was a good argument for seeing the state as an insurer
"There is, I think, a very good argument that the state should be the essentially the insurer here," he told the parliament, as well as claiming that any attempt to forecast the future of the British economy in the next year or two would be a "pie in the sky."
Bean explained that private insurers will probably not able to afford coronavirus losses and that according to evidence taking a big early action is better than taking half-hearted actions later.
“It’s better to end up spending a little too much here than not doing enough,” he said.
The head of the Office for Budget Responsibility, Robert Chote compared the outbreak to war, after saying that the economy was probably shrinking at the moment.
“This is not a time to be squeamish about one-off additions to the public debt. It’s more like a wartime situation that this is money well spent,” he said.
By 11:03 GMT the Pound sterling went down against the US dollar by 1.34 percent, falling to the 1.2102 level. Conversely, it lost 0.31 percent against the Japanese Yen, falling to the 129.44 level. On the other hand, it gained 0.59 percent.
Japan is Considering Tax Cuts
Meanwhile, the Japanese government is considering cutting taxes to help the Japanese economy, which is being heavily affected by the spread of the coronavirus epidemic.
“We will look into a wide range of options on tax, fiscal policy, and deregulation,” said the Japanese economy minister, Yasutoshi Nishimura, while explaining that despite that sales tax revenues was important to fund the Japanese social welfare system (making a reference to October's sales tax hike) the Japanese government needs to take the necessary steps to aid the economy.
When making a reference to business confidence levels, Nishimura explained that they're currently comparable to those during the 2008 crisis.
“Business confidence is tanking to levels comparable to those during the Lehman crisis,” he said.
By 11:25 GMT the US dollar went up by 1.02 percent against the Japanese Yen, hitting the 106.94 level. The Pound Sterling fell 0.30 percent against the Japanese Yen, falling to the 129.45 level while the Euro lost 0.37 percent, at 117.91.