I expect UK bank reserve to settle higher than in the past

Bank of England (BoE) Governor Andrew Bailey spoke at England’s Loughborough University, continuing a long-standing tradition of BoE Governors taking time to deliver speeches at the UK university.

Key highlights:

• BoE Governor Bailey expects UK bank reserves to continue falling from the current levels of around £467 billion.
• Despite an expected decline in UK bank reserves, Gov Bailey expects bank reserves to overall settle higher than historical norms.
• UK banks should use BoE liquidity more extensively.
• “UK banks have come through the turbulence of the last four years in sound health, and that has enabled them to contribute to maintaining financial stability and to support the economy and their customers during these difficult times.”
• Bailey: wouldn’t put too much weight on the UK entering a technical recession.
• BoE is beginning to see signs of an upturn.
• Any UK recession will be shallow.
• Bailey, BoE to put more emphasis on forward-looking data.