London Daily

Focus on the big picture.
Thursday, Oct 30, 2025

Where do Bank of England officials stand on negative rates?

Where do Bank of England officials stand on negative rates?

The Bank of England is weighing up how it could bring negative interest rates to Britain if needed, and there are differing views among its nine monetary policymakers.

The Bank of Japan and the European Central Bank have cut rates below zero to spur banks to lend and boost growth.

The BoE is considering what sub-zero rates would mean for Britain’s large banking industry, which relies heavily on household deposits, and whether in practice they would be likely to bring more lending and stronger economic growth in Britain.

Below are comments from members of the BoE’s Monetary Policy Committee. So far, there appears to be little consensus.

ENCOURAGED BY EVIDENCE


SILVANA TENREYRO, EXTERNAL MPC MEMBER


“The evidence has been encouraging,” Tenreyro said last month about the experience of the euro zone and Japan.

“Banks adapted well – their profitability increased with negative rates largely because impairments and loss provisions have decreased with the boost to activity and the increase in asset prices.”

GERTJAN VLIEGHE, EXTERNAL MPC MEMBER


“My own view is that the risk that negative rates end up being counterproductive to the aims of monetary policy is low,” Vleighe said last week.

“Given how low short-term and long-term interest rates already are, headroom for monetary policy is limited, and we must consider ways to extend that headroom.”

JONATHAN HASKEL, EXTERNAL MPC MEMBER


“(There is) some very, very good work there which ... suggests some positive evidence that negative rates have benefited the economy,” Haskel said this month.

“That said, the effectiveness is probably going to be contingent on the structure of the financial system and the position where we are in the cycle, so we have to look at that very carefully.”

UNDECIDED


ANDREW BAILEY, GOVERNOR


Bailey says the BoE has to have negative rates in its toolbox but has described evidence for their effectiveness as “pretty mixed”.

“We have to ask the question, if they’re in the toolbox, can we use them? But we are not near, and we haven’t addressed the question (of) should we use them,” he said earlier this month.

He has also said negative rates might be most effective when an economy is more clearly in a recovery phase.

BEN BROADBENT, DEPUTY GOVERNOR


“We keep under review all our potential policy tools and this is a question that’s been thought about on and off since the financial crisis and it’s a balanced judgment,” Broadbent said in May.

MICHAEL SAUNDERS, EXTERNAL MPC MEMBER


Last month Saunders said he was not “theologically opposed” to negative rates but he still had questions about their use.

He said British banks had a relatively high share of deposits so negative rates could squeeze profit margins sharply.

UNENTHUSIASTIC


DAVE RAMSDEN, DEPUTY GOVERNOR


“While there might be an appropriate time to use negative rates, that time is not right now,” Ramsden said last week.

“There can be knock-on economic effects through the banking system. These effects could reduce or even counteract the stimulus from negative rates.”

He said negative rates could be more attractive when there was less pressure on banks’ balance sheets.

JON CUNLIFFE, DEPUTY GOVERNOR


In June, Cunliffe said the BoE should not be dogmatic about using negative rates for the first time, but there were “acute” issues for the financial sector.

Negative rates had led to confusion among companies and households in areas where they had been used, he said.

ANDY HALDANE, CHIEF ECONOMIST


Judgements about negative rates would depend on the economic outlook, and only after the operational work needed to assess their feasibility had taken place, Haldane said last month.

Newsletter

Related Articles

0:00
0:00
Close
UK and Vietnam Sign Landmark Migration Deal to Fast-Track Returns of Irregular Arrivals
UK Drug-Pricing Overhaul Essential for Life-Sciences Ambition, Says GSK Chief
Princesses Beatrice and Eugenie Temporarily Leave the UK Amid Their Parents’ Royal Fallout
UK Weighs Early End to Oil and Gas Windfall Tax as Reeves Seeks Investment Commitments
UK Retail Inflation Slows as Shop Prices Fall for First Time Since Spring
Next Raises Full-Year Profit Guidance After Strong Third-Quarter Performance
Reform UK’s Lee Anderson Admits to 'Gaming' Benefits System While Advocating Crackdown
United States and South Korea Conclude Major Trade Accord Worth $350 Billion
Hurricane Melissa Strikes Cuba After Devastating Jamaica With Record Winds
Vice President Vance to Headline Turning Point USA Campus Event at Ole Miss
U.S. Targets Maritime Narco-Routes While Border Pressure to Mexico Remains Limited
Bill Gates at 70: “I Have a Real Fear of Artificial Intelligence – and Also Regret”
Elon Musk Unveils Grokipedia: An AI-Driven Alternative to Wikipedia
Saudi Arabia Unveils Vision for First-Ever "Sky Stadium" Suspended Over Desert Floor
Amazon Announces 14 000 Corporate Job Cuts as AI Investment Accelerates
UK Shop Prices Fall for First Time Since March, Food Leads the Decline
London Stock Exchange Group ADR (LNSTY) Earns Zacks Rank #1 Upgrade on Rising Earnings Outlook
Soap legend Tony Adams, long-time star of Crossroads, dies at 84
Rachel Reeves Signals Tax Increases Ahead of November Budget Amid £20-50 Billion Fiscal Gap
NatWest Past Gains of 314% Spotlight Opportunity — But Some Key Risks Remain
UK Launches ‘Golden Age’ of Nuclear with £38 Billion Sizewell C Approval
UK Announces £1.08 Billion Budget for Offshore Wind Auction to Boost 2030 Capacity
UK Seeks Steel Alliance with EU and US to Counter China’s Over-Capacity
UK Struggles to Balance China as Both Strategic Threat and Valued Trading Partner
Argentina’s Markets Surge as Milei’s Party Secures Major Win
British Journalist Sami Hamdi Detained by U.S. Authorities After Visa Revocation Amid Israel-Gaza Commentary
King Charles Unveils UK’s First LGBT+ Armed Forces Memorial at National Memorial Arboretum
At ninety-two and re-elected: Paul Biya secures eighth term in Cameroon amid unrest
Racist Incidents Against UK Nurses Surge by 55%
UK Chancellor Rachel Reeves Cites Shared Concerns With Trump Administration as Foundation for Early US-UK Trade Deal
Essentra plc: A Closer Look at a UK ‘Penny Stock’ Opportunity Amid Market Weakness
U.S. and China Near Deal to Avert Rare-Earth Export Controls Ahead of Trump-Xi Summit
Justin time: Justin Herbert Shields Madison Beer with Impressive Reflex at Lakers Game
Russia’s President Putin Declares Burevestnik Nuclear Cruise Missile Ready for Deployment
Giuffre’s Memoir Alleges Maxwell Claimed Sexual Act with Clooney
House Republicans Move to Strip NYC Mayoral Front-Runner Zohran Mamdani of U.S. Citizenship
Record-High Spoiled Ballots Signal Voter Discontent in Ireland’s 2025 Presidential Election
Philippines’ Taal Volcano Erupts Overnight with 2.4 km Ash Plume
Albania’s Virtual AI 'Minister' Diella Set to 'Birth' Eighty-Three Digital Assistants for MPs
Tesla Unveils Vision for Optimus V3 as ‘Biggest Product of All Time’, Including Surgical Capabilities
Francis Ford Coppola Auctions Luxury Watches After Self-Financed Film Flop
Convicted Sex Offender Mistakenly Freed by UK Prison Service Arrested in London
United States and China Begin Constructive Trade Negotiations Ahead of Trump–Xi Summit
U.S. Treasury Sanctions Colombia’s President Gustavo Petro over Drug-Trafficking Allegations
Miss USA Crowns Nebraska’s Audrey Eckert Amid Leadership Overhaul
‘I Am Not Done’: Kamala Harris Signals Possible 2028 White House Run
NBA Faces Integrity Crisis After Mass Arrests in Gambling Scandal
Swift Heist at the Louvre Sees Eight French Crown Jewels Stolen in Under Seven Minutes
U.S. Halts Trade Talks with Canada After Ontario Ad Using Reagan Voice Triggers Diplomatic Fallout
Microsoft AI CEO: ‘We’re making an AI that you can trust your kids to use’ — but can Microsoft rebuild its own trust before fixing the industry’s?
×