| 7:43:13 PM - Thu, Jul 29th 2021 |
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The UK's largest financial institution is following the Bank of England deadline to prepare for negative interest rates. This gives the authorities another tool to help the economy if the recovery starts to soften.
Banks, including Natwest Group Plc, HSBC Holdings Plc, Barclays Plc and Lloyds Banking Group Plc, are close to completing the technical steps needed to adjust negative interest rates. The UK's central bank in February asked work to be completed next month and is likely to submit a progress report on August 5.
“To meet the Prudential Regulation Authority's six-month expectations, our members are deploying a tactical solution to prepare the Treasury system in the event of negative base rates,” said a spokesperson for UK Finance, the banking industry's main lobby group.
But with growth recovering rapidly since BOE Governor Andrew Bailey called for preparations. Few expect this new function to be available anytime soon. The debate has shifted over when central banks should cut stimulus measures to stop rising inflation.
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