ASI: Bank of England not yet ready for negative interest rates
The Bank of England is not yet ready for negative interest rates. Below are Luke Bartholomew's comments on the Bank of England's announcement this morning. He's Senior Economist at Aberdeen Standard Investments.
“Given the resurgence of the virus and a return to a much more comprehensive lockdown, an increase in asset purchases from the Bank of England today was always extremely likely. As it was, the amount of easing delivered today was at the top end of expectations as the Bank seek to do all it can to support the economy", says Bartholomew.
He continues: "However, with the structure of rates already incredibly low, it is hard to believe QE can deliver a huge amount of further stimulus from here, even if does make it easier for the government to finance and deliver it’s huge fiscal easing. The Bank has shown it is not yet ready to take rates negative given operational considerations, and that they don’t really believe this is the appropriate economic backdrop to get the maximum possible stimulus from negative rates.”