BoE Governor Andrew Bailey rejects negative interest at a webinar organized by the Financial times. He said, negative rate is “not something we are currently planning for or contemplating”. He added that cutting interest rate below zero would need “an extensive communications exercise” in the UK. It’s a “very big step” from “communications point of view, as well as “reaction” and expectations”.
He also warned that the economy would suffer longer-term damage from the current coronavirus crisis. Nevertheless, it’s unclear whether a 30% contraction in GDP is H1, as projected by BoE, would prove overly pessimistic or an under-estimate.
