ASI: Chance of negative interest rates in UK has shrunken

ASI: Chance of negative interest rates in UK has shrunken

February 4, 2021

Interest Rates United States
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Below are comments from Luke Bartholomew, Senior Economist at Aberdeen Standard Investments (ASI), following today's BoE meeting.

No surprises today from the Bank of England, at least in terms of its interest rate decision. What is perhaps more interesting is that the decision was unanimous, with no participants voting for a cut to negative interest rates despite several expressing their attraction to the policy.

This is unlikely to be the end of that debate, with the Bank releasing feedback from various stakeholders today along with their previous analysis. However, the chance of a cut to negative rates at least in the near term has probably decreased somewhat, as the Bank watches to see how vaccine roll out progresses and how the economy eventually recovers from the COVID-19 shock.

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