The headline from the Bank of England’s latest report released on Thursday is that “negative interest rates” have come a step closer for the UK economy.
Commercial banks have been instructed to “commence preparations” for the official cost of borrowing to go into reverse – and to be in a position to process negative rates, set by the UK’s central bank, in their own internal computer systems.
From that perspective this is a significant day in UK monetary policy history and for a country which has never seen a negative cost of borrowing imposed since the Bank of England was founded in 1694.
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