18
Dec
Bank of England MPC member hints at zero rate
The Bank of England's deputy governor Charles Bean has stated that
the monetary policy committee (MPC) - on which he sits - could well
lower the base rate to zero.
In an interview with the Financial Times, Professor Bean
acknowledged that it is a "possibility" that rates could fall that
low.
He added: "The bank rate is still at two per cent, so we still have
some margin to go yet, but of course we may find ourselves getting
them all the way to near zero."
However, he cautioned against the notion - which he attributed to
sections of the media - that such a rate could be implemented in
January.
Any further cut next month could help lower the cost of
mortgages.
Responding to the minutes of this month's MPC meeting, the Ernst
& Young Item Club predicted yesterday that next month will see
the base rate cut by another one per cent.
