BoE expects economy to revive, unveils new 50-pound banknote

Bank of England (BoE) Chief Economist Andy Haldane said on Thursday he remained confident that Britain’s economy was poised for a quick bounce-back as the country races ahead with its coronavirus vaccinations and restrictions are lifted.

Meanwhile, the central bank has unveiled a new banknote celebrating mathematician Alan Turing, who helped Britain win World War Two with his code-breaking skills.

Sarah John, Chief Cashier at the Bank of England, unveiled the new 50-pound note featuring scientist Alan Turing. The rainbow flag flied above the Bank of England in the heart of London’s financial district to commemorate legendary Alan Turing, the new face of Britain’s 50-pound note. The design of the banknote, which is the most valuable in circulation, was unveiled Thursday before it is formally issued on June 23, Turing’s birthday.

The new 50-pound ($69) note features an image of Turing, mathematical formulae from a 1936 paper he wrote that laid the groundwork for modern computer science, and technical drawings for the machines used to decipher the Enigma code. The polymer note also carries a quote by Turing about the rise of machine intelligence: “This is only a foretaste of what is to come, and only the shadow of what is going to be.” “My sense will be chatting to people, they are desperate to get their lives back, desperate to get out spending and socialising and working,” Andy Haldane told ITV television.

“And if that happens then some of those savings do get spent. Even a small amount of them, we are talking about a pretty rip-roaring recovery.”

Haldane has been the most upbeat member of the BoE’s nine-strong Monetary Policy Committee about the economy’s growth prospects although he said there was a risk that people remained unwilling to go out and resume their normal lives.

Last week Haldane said he expected a “rapid-fire recovery” and has previously likened the economy to a coiled spring as households prepare to spend the money that they have saved after being stuck at home for much of the last year.

Haldane told ITV it was important that households spent down those savings as a way to create jobs for the people hit hardest by the crisis - the young, the poor, the least skilled, women and ethnic minorities.

In the longer term, education, infrastructure and other investment would be key to maintaining growth and reducing inequality, he said.

“There’s something of the character of a nation in its money,” BoE Governor Andrew Bailey said in a statement on Thursday, which highlighted the breadth of Turing’s accomplishments.

A Bank of England-backed industry group has resisted a call by a lobby for the loan market to be flexible on a “significant” but long flagged milestone for scrapping the Libor benchmark interest rate.

Britain’s regulators have already set an end of March deadline for when no new loans maturing after Dec. 31 should be priced using the London Interbank Offered Rate or Libor, the tarnished interest rate being scrapped at the end of the year.

Replacing Libor after banks were fined billions of dollars for trying to rig the benchmark has proved one of the biggest challenges faced by financial markets for decades.

While progress has been good in derivatives, loans have lagged somewhat as businesses come to grips with the task.

The Loan Market Association asked the BoE-backed industry group in January if the end of March milestone “should be made more flexible” so that “funds continue to flow to the real economy,” minutes of the meeting published by the BoE on Wednesday showed.

The Loan Market Association’s members include commercial and investment banks, institutional investors, law firms, service providers and rating agencies.

The Bank of England-backed group’s chair, Barclays finance director Tushar Morzaria, expressed “reluctance to relax such a significant milestone”, the minutes showed.

Edwin Schooling Latter, a senior official at Britain’s Financial Conduct Authority, said there was a “clear expectation” that lenders should be capable of offering loans priced off the BoE’s overnight Sonia rate “at scale” from the end of March. Sonia is the rate that replaces Libor in Britain.

The group should be “trying to provide solutions to any market difficulties, rather than relaxing a long-standing milestone”, Loan Enablers Task Force Chair Jamieson Thrower said.

The BoE’s Alastair Hughes said the lending market should not be dictated to by the progress of the slowest firms and supervisors would take a “keen interest” in any remaining sterling Libor lending after the end of March.