BoE Governor Andrew Bailey said today that negative rates are a “controversial issue” and there are “a lot of issues” with it. He added that negative rates would complicate banks’ efforts to earn a rate of return, and potentially hurt their lending.
Bailey added that “we’re in a world of low rates for a long period of time”. Outlook for interest rates “hinges on productivity growth”. At this point, it’s “too soon to reach any conclusion about the need for future stimulus.
On the economy, he said, We’re”in a very difficult period at the moment and there’s no question that it’s going to delay, probably, the trajectory.”
