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Bank of England said to be considering a move into negative rates

The Bank of England (BoE) is said to be considering a move into negative interest rates, the Telegraph newspaper reported late on Wednesday, without citing any sources, ahead of the central bank’s November monetary policy decision on Thursday.

The BoE is in the midst of a review of how negative interest rates would work in Britain if necessary. It is still talking to banks about their preparedness.

None of the economists polled by Reuters expect an imminent move into negative rates. They expect the BoE to expand its asset purchase programme by 100 billion pounds to 845 billion pounds due to the deteriorating economic outlook as England enters a second COVID lockdown.

However, the Sun newspaper, citing unnamed sources, reported bit.ly/2I65A3u that the BoE is planning a much bigger programme of quantitative easing than the expected addition of 100 billion pounds.

The addition is likely to be around 150 billion pounds but it could also be as high as 200 billion pounds, the report added, without quoting sources.

Finance minister Rishi Sunak is also due to give an update on economic support measures related to the lockdown on Thursday.

According to the Telegraph report, Sunak is expected to confirm that furloughed workers will get 80% of their wages so long as their businesses are mandated to shut.