Economics
BOE Steps Up Negative Rates Work as Economic Threats Mount
- U.K. central bank will work with regulators on subzero rates
- Pound falls and investors raise bets on cut to borrowing costs
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The Bank of England gave the clearest signal yet that it may consider cutting interest rates below zero for the first time in its history as the economy faces a surge in coronavirus infections and the risk of a no-deal Brexit. The pound fell.
With multiple threats to the outlook looming, the BOE will begin “structured engagement” with U.K. bank regulators on how it might implement negative rates. Governor Andrew Bailey said last month the policy has become part of the central bank’s toolkit.