Since the Committee’s March meeting, authorities around the world had taken action to halt the spread of the pandemic and to support their economies. The spread of Covid-19 and the measures taken to contain it were having a significant impact on the United Kingdom and many countries around the world. Activity had fallen sharply since the beginning of the year and unemployment had risen markedly.
As set out in its statement on 9 April, on 7 May 2020 the Committee published its assessment of the risks to UK financial stability and the resilience of the UK financial system to ongoing economic and market shocks in an interim financial stability report (interim FSR), alongside the May Monetary Policy Report (MPR) and this Record. The interim FSR would serve as the Record of the Committee’s judgments and associated deliberations at its meeting on 5 May.
Written decisions taken by the FPC since March
Since its March meeting, the FPC had also taken a number of decisions by written procedure. These decisions included agreements to postpone certain planned initiatives to alleviate the operational burden on the Bank and banks, who at the time were rightly focussed on dealing with the Covid-19 disruption, and to support banks’ lending capacity to the real economy. These actions, together with the actions agreed by the Committee at its March meeting, would further contribute to ensuring that the UK financial system could be a source of strength to the economy during this challenging period. The Committee emphasised that the decisions had been taken for pragmatic reasons, given the unprecedented current circumstances, and in no way reflected a change in strategic direction for the FPC in relation to the relevant issues.
The decisions, and a brief outline of the considerations which factored in the decisions, are outlined in this Record.
Record of the Financial Policy Committee - May 2020 