(Bloomberg) -- The Bank of England is not yet ready to implement negative interest rates, Governor Andrew Bailey said on a webinar Monday.
The central bank earlier announced that it is seeking information from U.K. financial institutions on their ability to implement sub-zero rates without damaging their business. That is an operational question and policy makers are not currently addressing whether to introduce them, Bailey said.
“Given the shock we've had, there are good reasons to say we shouldn't rule them out and therefore they're in the toolbox,” he said. “We haven't addressed the question of should we use them.”
Speculation officials will take borrowing costs below zero has grown in recent weeks as a resurgence of the coronavirus, rising unemployment and the potential for a messy Brexit reinforced downside risks to the U.K. economy.
Policy makers have already expanded asset purchases and slashed rates to a record 0.1% since the virus hit the U.K. They are widely expected to increase the quantitative easing target again at their Nov. 5 meeting.
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