BOE Steps Up Negative Rates Work As Threats To Economy Multiply

• The Bank of England gave the clearest signal yet that it may consider cutting interest rates below zero for the first time in its history as the economy gears up for a period of unusual uncertainty. The pound fell.
• With multiple threats to the outlook looming, the BOE will begin “structured engagement” with U.K. bank regulators on how it might implement negative rates. While officials had previously said they were reviewing the case for such a move, and Governor Andrew Bailey has not ruled it out, the preparation goes beyond anything is seen before.
• The comments in the minutes of Thursday’s policy decision prompted investors to bet that the next 10 basis points of easing will come in May, with another cut of the same magnitude to follow in November 2021. The pound weakened and was trading down 0.5% at $1.2905 at 12:34 p.m. in London.

(Source: Bloomberg)