- BoE's MPC member Tenreyo: Work on feasibility of negative rates is still in progress; I have nothing new to add to this
Market news
11 January 2021
BoE's MPC member Tenreyo: Work on feasibility of negative rates is still in progress; I have nothing new to add to this
- If that is the case, having negative rates in our toolbox will, in my view, be important
- It's possible that more stimulus will be needed
- There's no evidence that negative rates will hurt bank profits, possible that the current structure of UK banking system could lead to a less-positive outcome
- Negative bank rate does not, therefore, imply that rates facing households and businesses will necessarily turn negative
- My decisions on stimulus will depend on the outlook at the time of voting
- All else equal, looser monetary policy can help the economy recover faster
- Experiences of other countries suggest negative rates effective
- Resurgence in virus likely to mean a significant loss in jobs
- Even if UK vaccinates quickly, a slower rollout in trading partners could weigh in UK
- Speed of rebound will depend on the speed that savings are released
- For Q4 2020 and Q1 2021, we will see headline-grabbing negative numbers, big positive ones when the economy can reopen
- QE more effective to offset disruption rather than providing net additional stimulus
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