MNI BRIEF: Negative Rates May Be BOE's Best Tool: MPC Saunders

The Bank of England could find it preferable in some circumstances to cut interest rates into negative territory rather than extend quantitative easing, Monetary Policy Committee member Michael Saunders said Thursday. Saunders said that the question of which tool to use depended on the shock the economy is facing and what the MPC was trying to achieve -- If the aim was to lower the yield curve, then setting a negative Bank Rate might be the best option.

He told a Resolution Foundation online event that in six months' time negative rates would be "operationally feasible," with banks readying for them, and he made clear they could be his preferred option if fresh stimulus was required.