The BoE's nine monetary policymakers voted 8-1 to keep its government bond-buying programme at 875 billion pounds ($1.22 trillion). They voted 9-0 in favour of keeping its corporate bond programme at 20 billion pounds.
Israel's inflation rate moved to 0.8% in April from 0.2% in March, just below the government's 1-3% annual target range. While the economy contracted an annualised 6.5% in the first quarter from the prior three months, growth is expected to reach 4-6% in 2021 given more than half of Israeli adults are already vaccinated and the economy has largely reopened.
Commercial banks should follow BoE advice to make sure they are ready to implement negative interest rates, although the central bank does not yet know if they will be needed later this year, Haskel added.
Risk management considerations dictate that policy should lean strongly against downside risks to the outlook and I remain open to the possibility that the economy might need further support to return inflation to the target sustainably.
The Reserve Bank of India kept rates steady at record low levels this month and said it would maintain support for recovery from the coronavirus by ensuring ample liquidity.
The near-term outlook for inflation appears less risky than the near-term challenges for growth which warrant continuing policy support, at least until the elusive engine of investment fires and consumption, the mainstay of aggregate demand in India, stabilizes.