BoE Expected to Cut Main Rate to 0% with Negative Rates Possible

The Bank of England (BoE) is expected to reduce its key interest rate to 0% in November, as per a recent research report by the Bank of America, Bloomberg reported.

The BoE plans a GBP 100 billion ($131 billion) extension to its asset purchase program until mid-2021.

In addition, the central bank aims at supporting businesses against the impacts of the COVID-19 crisis.

“The BOE has, in our view, no monetary ammunition left if it believes the lower bound for bank rate is the current 0.1%,” the report said.

“Downside economic risks lie ahead. With few options left we see the probability of the BOE cutting bank rate negative next year approaching 50%.”