Expectations for the Bank of England to cut rates by 25 basis points to 0.25 percent next month are growing. While the central bank is not forecast to mimic its counterparts at the European Central Bank, Swiss National Bank or Bank of Japan by moving to negative interest rates any time soon, it is expected to hold rates at what would be a further historic low until the end of 2018, according to forecasts from Capital Economics.
Michael Pearce, global economist at Capital Economics, told CNBC he thought that the BoE was "quite a long way away" from negative deposit rates, if it ever enacted them.
The news of NatWest's letter caused consternation in the U.K., where recent data from the British Bankers' Association (BBA) showed business borrowing dropped for the first time in June as businesses delayed investment ahead of the Brexit vote.
Mike Cherry, national chairman at the U.K.'s Federation of Small Businesses (FSB), said the news is "deeply concerning to small firms."
"Small business confidence is already at a four-year low. Firms are less optimistic, cutting headcount and curbing investment intentions."