Bank of England moves on negative rates are contingency planning-Ramsden

Bank of England Deputy Governor Dave Ramsden said contingency planning by the central bank for the possibility of negative interest rates was very different from any decision to actually take borrowing costs below zero.

“We want to be in a position that if things didn’t get better as we are forecasting, if some of the downside risks around new variants arose, that that tool of negative rates can be feasibly used if at the time we made the policy decision to use it,” Ramsden told the Yorkshire Post newspaper.

“So we have asked banks on a contingency basis to do the preparations over the next six months so that tool is ready. But that is very different from thinking it will be used.”

Ramsden has previously said he believes the BoE’s bond-buying programme remains its primary stimulus tool if the central bank decides the economy needs more support.