LONDON – As the coronavirus outbreak worsens in the United Kingdom, the British establishment is considering resorting to more and more drastic measures to contain the crisis that the coronavirus outbreak cause. Earlier on Wednesday, the Governor of the Bank of England, Andrew Bailey, told Sky News he is considering printing money to distribute to households to ease their financial burden.
Governor Andrew Bailey, who is effectively in charge of the United Kingdom’s central bank, said the Bank of England will do “what it takes” to overcome the “unprecedented” economic “emergency”.
The intervention of the governor of Bank of England is remarkable in itself, but the suggestion that the United Kingdom’s Central Bank is going to print money – and risk setting in motion inflationary forces – will come as a surprise to most seasoned British economic observers.
Governor Bailey’s intervention underscores the gravity of the economic and financial situation in the United Kingdom, with many companies either drastically reducing their employees’ working hours or in some cases making them redundant altogether. In addition, many workers are being forced to work from home, which could have an adverse impact on their wage packets.
The idea of mass cash handouts is presumably designed to partially remedy the critical situation by making sure most working families can continue to make ends meet during the crisis caused by the coronavirus outbreak. However, these desperate measures might end up creating more damage than good, since printing additional money may cause hyperinflation, further adding to the general economic crisis.
It also indicates that the Chancellor, Rishi Sunak’s £330 billion bailout package for major UK businesses, announced on Tuesday, hasn’t managed to assuage widespread fears of economic and financial chaos in the wake of the coronavirus pandemic. Adding hyperinflation to the existing problems would definitely sink the UK’s struggling economy.