Central bank policy was back in focus in the U.K. on Friday with one member of the Bank of England's monetary policy committee telling a newspaper that the country could adopt a negative rate policy.
"Theoretically, I think interest rates could go a little bit negative." Gertjan Vlieghe, who joined the committee in September last year, told London-based newspaper The Evening Standard on Friday.
Vlieghe added that the central bank would "have to think very carefully" about whether the positive effects would outweigh the downside.
"Even if you are willing theoretically to consider negative interest rates, there is only so far that they can go negative before you start worrying about the thing that central bankers have been worrying about all these years — which is: 'not only am I not getting any interest paid on my money in the bank, it is now potentially going to charge me, in which case I won't keep my money in the bank, I'll just take it out and keep it at home'," he added in the article.
"Once that happens, that is almost certainly negative for the economy because then you undermine the whole bank funding model ... so we want to stay well away from that scenario."