FILE PHOTO: Bank of England Governor Andrew Bailey poses for a photo on the first day of his new role at the Central Bank of London, Britain, March 16, 2020. Tolga Akmen / Pool via REUTERS
(Reuters) – Bank of England (BoE) Governor Andrew Bailey wrote a letter to lenders warning them of the challenges of negative interest rates, the Sunday Times newspaper reported.
The letter said negative rates were “one of the potential tools under active review” if the monetary policy committee decided that “more stimulus” was needed to reach the Bank of England’s 2% inflation target, the newspaper Bit reported. .ly / 38tyTq7. He did not disclose how he gained knowledge of the letter’s content.
The report said Bailey held a meeting with bank bosses in late June and that negative rates were discussed at that meeting in which the governor said “every tool they have is on the table.”
Regarding negative interest rates, Bailey previously said that they were an option for the Bank of England, but that the problem was complex and that borrowing costs below zero were not imminent.
Kanishka Singh’s report in Bangalore; Editing by Kenneth Maxwell
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