BoE Chief Economist Andy Haldane said in a speech that the MPC minutes “contained no such signal” as it’s introducing negative rates in the near-term. The operational feasibility assessment of negative rates is “likely to take a number of months”. Then, judgement on negative rates will depend on the economic outlook. The decision would then depend on the balance of costs and benefits, , with comparison to other monetary tools.

“All three of these conditions would need to be satisfied before negative rates became a reality. At present, none of those conditions is in my view satisfied,” he added.

Haldane also urged that “encouraging news about the present needs not to be drowned out by fears for the future. Now is not the time for the economics of Chicken Licken”

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“This is human nature at times of stress. But it can also make for an overly-pessimistic popular narrative, which fosters fear, fatalism and excess caution. This is unhealthy in itself but, if left unaddressed, also risks becoming self-fulfilling.”

Full speech here.


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