18 Dec

Bank of England MPC member hints at zero rate

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.

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