June 9, 2020 / 3:31 PM / a month ago

BoE's Cunliffe says mixed views on use of negative rates

LONDON, June 9 (Reuters) - There are mixed views on negative interest rates given the damaging impact they could have on the financial system, Bank of England Deputy Governor Jon Cunliffe said on Tuesday.

The BoE has said it was analysing whether it should cut interest rates to negative levels as the economy faces its worse recession in 300 years due to the coronavirus pandemic.

Cunliffe said there was a need first to analyse whether negative rates would work, how they could be communicated to people and businesses to avoid confusion, and what impact they could have on banks, before looking at how they could be implemented.

“We need to think about its impact on the financial system, on the stability of the financial system and also on business models of financial sector firms,” Cunliffe told an Investment Association online event. (Reporting by Huw Jones, editing by David Milliken)

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