The prospect of negative interest rates has again been raised by the Bank of England, this time by Chief Economist Andy Haldane, causing the pound to weaken against the euro.
The pound had already ended last week down against the euro, after David Frost warned that Brexit talks had made ‘very little progress’. His counterpart Michel Barnier said that the UK is ‘not realistic’ in what it wants from the European Union, while Frost said the EU was attempting to ‘bind’ the UK to a set of ‘novel and unbalanced proposals’. The EU is said to be stepping up its preparations for a return to WTO rules. The UK is expected to make its draft legal texts public this week.
Earlier last week, the pound also dropped on the release of GDP figures showing growth to have contracted at 2%, with Rishi Sunak commenting that the UK is likely to already be in a recession.
