Bank of England has headroom to act, Ramsden says

FILE PHOTO: Bank of England Deputy Governor for Markets and Banking, Dave Ramsden attends a Bank of England news conference, in the City of London, Britain November 1, 2018. Kirsty O’Connor/Pool via REUTERS

LONDON (Reuters) – The Bank of England has more headroom to act to support the economy, Deputy Governor Dave Ramsden said on Friday, confirming that negative interest rates are in the central bank’s toolbox.

“I’m not going to get into speculation about where we might be in November but we do have further headroom,” Ramsden told CNBC in an interview, a day after the BoE said it saw no immediate case to cut interest rates below zero.

On Thursday the BoE explored the use of negative interest rates in its quarterly Monetary Policy Report – the first time it had done so in the Bank’s flagship publication, Ramsden said.

“They are part of the toolbox, we’re not actively planning for negative rates or indeed using them. We’re using tried and tested policies,” Ramsden said, referring to the BoE’s asset purchases.

The BoE cut interest rates to just 0.1% in March and expanded its bond-buying plan to almost $1 trillion.

On Thursday, its nine monetary policymakers all voted for no policy changes as they sketched out a slow path to recovery.

“We are forecasting that the recovery continues, we think the pace of the recovery will slow,” Ramsden said.

Reporting by William Schomberg and Kate Holton, Writing by Andy Bruce, editing by Sarah Young

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