Economics

BOE Officials Signal Openness to Negative Rates as Stimulus Tool

Saunders says interest-rate cut with QE better than QE alone
BOE is reviewing the issue of taking rates below zero

A double-decker bus passes the Bank of England (BOE) at night in the City of London, U.K., on Tuesday, Aug. 4, 2020. Bank of England officials could signal on Thursday that the case for more monetary stimulus is growing as a nascent rebound from the pandemic-induced recession risks fading.Photographer: Simon Dawson/Bloomberg

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By Fergal O'Brien and Lucy Meakin

December 4, 2020 at 9:41 AM UTC

Updated on

December 4, 2020 at 2:35 PM UTC

This article is for subscribers only.

Two Bank of England policy makers indicated they were open to using negative interest rates if the U.K. needs more monetary stimulus at some point in the future.

The BOE has never cut interest rates below zero before, but is reviewing that option to see if it’s possible. Monetary Policy Committee member Michael Saunders said Friday there’s some room to cut rates as part of a range of tools. His colleague Silvana Tenreyro said the evidence from elsewhere is “supportive” of their use.