Negative Rates Worked Abroad, Now It's Britain's Turn

The U.K. is looking for ways to set itself apart from its European neighbors after Brexit. On monetary policy, however, Britain could soon become more European. The Bank of England is studying the possibility of cutting interest rates below zero, as central banks in Denmark, Sweden, Switzerland and the euro zone have all done in the recent past.

Policy makers should embrace the idea with enthusiasm. As Silvana Tenreyro, a member of the bank’s rate-setting Monetary Policy Committee, said in a speech on Monday, the international evidence shows negative rates are a helpful tool to boost growth and lift inflation. The criticism that they cause more harm than good appears vastly overblown.