MNI BRIEF: BOE Outlines Negative Rate Plans To CEOs

The Bank of England has Monday written to the CEOs of 'specific' firms, explaining that the central bank is beginning a consultation on negative and zero interest rates with the financial sector.

The letter, released by the BOE and signed by Sam Woods, Deputy Governor for Prudential Regulation, says this is a discussion and firms should not take steps to be operationally ready for zero or negative rates yet.

"The appropriate level of Bank Rate remains a decision for the MPC, which sets monetary policy to meet the 2% inflation target in a way that helps to sustain growth and employment. This engagement is not asking firms to begin taking steps to ensure they are operationally ready to implement a negative Bank Rate. We recognise that a negative policy rate could have wider implications for your firm's business and your customers," the letter from Woods says.