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BoE’s boss dismisses negative interest rates as option for UK

BoE’s boss dismisses negative interest rates as option for UK

Mubasher: Bank of England’s (BoE) governor Mark Carney ruled out negative interest rates as an option for the UK’s economy currently, Reuters reported.

“I am not criticising others that have used them, but we don’t see it as an option,” Carney was quoted by the news agency as telling website Central Banking.

The BoE maintained its interest rate at 0.75%, on the grounds of high employment rate and inflation hovering close to its 2% target.

Carney believes that negative interest rates can be “counter-productive.”

The UK policymakers’ view “is that the effective lower bound is close to zero, but positive [or] just above zero,” the bank’s governor said.

The UK central bank has tended less to slash borrowing costs than some of its peers.

However, the UK’s departure from the European Union (EU), due on 31 October, without a transition deal, could prompt the bank to trim rates to boost economic growth during the likely aftermath.

Carney called upon France and Germany to take measures to secure a smooth functioning of uncleared derivative contracts after the Brexit.