Negative interest rates could be necessary to protect UK economy, says Bank of England chief economist

18-Sep (Telegraph) — The Bank of England may need to push its interest rates into negative territory to fight off the next recession, its chief economist has said.

Andy Haldane, one of the Bank’s nine interest rate setters, made the case for the “radical” option of supporting the economy with negative interest rates, and even suggested that cash could have to be abolished.

He said that the “the balance of risks to UK growth, and to UK inflation at the two-year horizon, is skewed squarely and significantly to the downside”.
As a result, “there could be a need to loosen rather than tighten the monetary reins as a next step to support UK growth and return inflation to target”.

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PG View: And the BoE was believed by many to be on a path, along with the Fed, toward rate lift-off. Suddenly the balance of growth and inflation risks are “squarely and significantly to the downside” and there’s talk from a policymaker of NIRP and abolishment of cash? What happened?