Comments by BOE chief economist, Andy Haldane
- Any decision on negative rates would depend on cost-benefit analysis
- Work on negative rates likely to take months
- Commentators have interpreted the start of work on negative rates as conveying signal about likelihood of introducing them in the near-term
- BOE minutes contained no such signal
- BOE committed to keep borrowing costs at extraordinary low levels
- Economy has recovered faster than anyone expected
- Positive news have received less attention than it deserves
- Overly pessimistic narrative risks becoming self-fulfilling
Haldane offering an added push back against negative rates - for now at least - but as mentioned before, the BOE communication on this has been all over the place that it is hard to take these remarks with any firm commitment.
Sure, they are not going to cut the bank rate into negative territory just yet but it is certainly an option that looks more and more likely given the current situation.
The defiance is frankly quite astonishing and if they weren't seriously considering it, then they wouldn't have started work into looking at it as an option surely.
And in all honesty, this "work" is pretty much just to preempt markets. Negative rates aren't anything new these days, so the narrative here is indeed perplexing.
I would say that more coherent and consistent communication would do more good than their mixed messaging over the past few weeks.
