BoE mulls negative interest rates

The Bank of England is considering introduction of negative interest rates to force banks to lend more to small businesses, amid concerns that current policies are not reaching the small and medium sized enterprises sector, as it was initially expected. The Bank of England Deputy Governor Paul Tucker said the idea of negative rates had been discussed at February's rate-setting meeting. He also claimed his readiness to increase the amount of asset purchase programme, as policy makers stressed the central bank has the flexibility to expand stimulus, if needed. Earlier this month, the BoE was already considering cutting rates below their current record low of 0.5%, however, restrained from this action due to the potential damage it would do to nation's building societies, which are more dependent on deposit income than banks.