Bank of England Deputy Governor Paul Tucker today admitted that the prospect of negative interest rates to boost lending was a non-starter, little more than two months after floating the idea.
Tucker suggested to MPs in February that lenders could be charged on their deposits with the central bank in a bid to get credit flowing in the economy. The comments were immediately described as “blue-sky thinking” by fellow deputy Charlie Bean.
Tucker told a regional newspaper: “It’s most unlikely it would happen in the context of the debate within Parliament but it’s important that we are open and that we should think about all sorts of things. I wouldn’t want the public to think that we sit on our hands and know the answers to everything — we are always trying to think about new things.”
He also struck a more upbeat tone on the economy following the UK’s 0.3% advance between January and March.
“We shouldn’t get too excited by one quarter but looking over the past year, it’s perhaps not as bad as the headline figures suggest,” he said.
