More information on negative interest rates from the UK. Haldane points out that such rates are under consideration, and in particular their impact on the economy. At the same time, he emphasizes that this does not mean that such rates will be introduced. Also, Haldane points out that monetary policy may provide more of a cushion for the economy, but stronger blows must meet with the response of the fiscal policy. One can see that we still have a lot of uncertainty regarding the negative interest rates. Yesterday, Vlieghe indicated that BoE is not at a point yet when it can reach a conclusion on this issue.
Meanwhile, the GBPUSD pair pulled back. It is not likely to be related to the comments regarding the interest rates. We observe similar movements on the EURUSD. Interestingly, the move on the dollar does not go hand in hand with the move on the bond yields. However, a slightly positive recovery is visible on European stock exchanges.
GBPUSD continues to pull back, though mainly due to stronger dollar. Source: xStation5
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