2 Feb

Bank 'has more tools to help boost lending'

Bank 'has more tools to help boost lending'

The Bank of England has tools other than interest rates with which to seek to boost lending, an economist has stated.

Chief European economist at Capital Economics Jonathan Loynes said that it is likely the base rate will drop to near zero, at which point there will be no further scope for using monetary policy.

Instead, he suggested, the Bank will buy up bonds from both the corporate sector and the government, adding: "The aim of that will be to increase the amount of money that the banks have available to them to lend into the economy."

Such a move will also be aimed at bringing down "longer-term" interest rates, Mr Loynes concluded.

Any measures that help to increase lending could help first-time buyers and property investors seeking mortgage finance.

The policy of cutting rates to near zero has already been adopted in the US, where this week the Federal Reserve decided to maintain its rate of a range between zero and 0.25 per cent.ADNFCR-1222-ID-19002425-ADNFCR

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