Negative base rate 'remains an option', says MPC's Bean

Reducing the base rate from its current historical low of 0.5% into negative territory "remains an option" for the Bank of England's Monetary Policy Committee (MPC), deputy governor Charles Bean has said.

The move would not necessarily lead to immediate reductions for retail interest rates or deposit rates, though that would naturally occur should the official rate remain below zero for some time, Bean said in a note to Treasury Select Committee (TSC) chairman, Andrew Tyrie. Tyrie had requested details on the prospect of negative rates after the issue was raised by then-deputy governor Paul Tucker at a TSC hearing with the MPC in February. Bean pointed out that the MPC had always had the power to set negative interest rates - a move which would see commercial banks pay the BoE for hold...