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Mohamed A. El-Erian

Bank of England and U.K. Show How to Deal With Virus

A rate cut combined with fiscal action demonstrates the right policy response.

A “whole of government” response.

A “whole of government” response.

Photographer: Stefan Rousseau/WPA Pool/Getty Images

Despite losing an empire and the sterling as the world’s reserve currency, the U.K. managed for years to punch well above its weight on international economic and financial issues, often critically informing and influencing key decisions and policy pivots. The policy announcements by the Bank of England and the U.K. Treasury on Wednesday suggest that this is still possible despite concerns about the unintended negative consequences of Brexit. In the process, they have set an important example for other central banks.

 Let’s start with the Bank of England.