{"id":53431,"date":"2020-05-23T08:06:55","date_gmt":"2020-05-23T13:06:55","guid":{"rendered":"https:\/\/olduvai.ca\/?p=53431"},"modified":"2020-05-23T08:07:04","modified_gmt":"2020-05-23T13:07:04","slug":"what-horrified-fund-managers-banks-uks-pension-minister-said-about-the-bank-of-englands-sudden-we-dont-rule-out-negative-interest-rates","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=53431","title":{"rendered":"What Horrified Fund Managers, Banks & UK\u2019s Pension Minister Said About the Bank of England\u2019s Sudden \u201cWe Don\u2019t Rule Out\u201d Negative Interest Rates"},"content":{"rendered":"\n

What Horrified Fund Managers, Banks & UK\u2019s Pension Minister Said About the Bank of England\u2019s Sudden \u201cWe Don\u2019t Rule Out\u201d Negative Interest Rates<\/a><\/h3>\n\n\n\n

\u201cThe stimulus the country urgently needs is not experimental and dangerous monetary policy.\u201d<\/strong><\/p>\n\n\n\n

Andrew Bailey, the recently appointed governor of the Bank of England (BoE), is considering going where no other BoE governor has ever gone in the central bank\u2019s 325-year history: into negative interest rate territory. On May 20, Bailey told<\/a> British MPs that the BoE is refusing to rule out cutting the benchmark interest rate below zero in response to the virus crisis.<\/p>\n\n\n\n

\u201cWe do not rule things out as a matter of principle. That would be a foolish thing to do,\u201d Bailey told MPs. \u201cBut that doesn\u2019t mean we rule things in either.\u201d<\/p>\n\n\n\n

That statement came just six days after Bailey had told<\/a> FT readers that negative interest rates are \u201cnot something we are currently planning for or contemplating.\u201d Since then, Bailey says he has \u201cchanged [his] position a bit.\u201d<\/p>\n\n\n\n

Bailey, who replaced Mark Carney as BoE governor just two months ago, is not the only senior BoE official who\u2019s apparently warming to the idea of foisting negative interest rates on the British economy.<\/p>\n\n\n\n

So, too, has the central bank\u2019s chief economist Andrew Haldane, who last week said<\/a>: \u201cThe economy is weaker than a year ago and we are now at the effective lower bound, so in that sense it\u2019s something we\u2019ll need to look at \u2013 are looking at \u2013 with somewhat greater immediacy. How could we not be?\u201d<\/p>\n\n\n\n

In the wake of the virus crisis, the Bank of England has already slashed interest rates by 0.65 basis points to 0.1%, its lowest level ever. It has also revved up its swap lines with the Federal Reserve and other central banks, offered billions of pounds of fresh liquidity support to banks, and expanded its QE program by \u00a3100 billion to \u00a3745 billion and extended what it buys to include corporate bonds.<\/p>\n\n\n\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"

What Horrified Fund Managers, Banks & UK\u2019s Pension Minister Said About the Bank of England\u2019s Sudden \u201cWe Don\u2019t Rule Out\u201d Negative Interest Rates \u201cThe stimulus the country urgently needs is not experimental and dangerous monetary policy.\u201d Andrew Bailey, the recently appointed governor of the Bank of England (BoE), is considering going where no other BoE […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[56,431,558,27230,661,4255],"class_list":["post-53431","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bank-of-england","tag-interest-rates","tag-negative-interest-rates","tag-nick-corbishley","tag-qe","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/53431","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=53431"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/53431\/revisions"}],"predecessor-version":[{"id":53433,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/53431\/revisions\/53433"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=53431"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=53431"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=53431"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}