LONDON (Reuters) – Britain’s finance ministry has no plan for the Bank of England to cut the amount of interest it pays to banks, the Treasury’s top official said on Monday, following suggestions from some former BoE deputy officials said this should be considered.
“There will be no plans to do that,” permanent secretary James Bowler said, after Anthony Browne, a member of parliament’s Treasury Committee, asked if the BoE should stop paying interest on some of the reserves that banks hold.
Former BoE deputy governors Charles Bean and Paul Tucker have said the BoE should reconsider how it pays interest on around 950 billion pounds of reserves that banks hold.
The BoE’s current governor, Andrew Bailey, has said he does not see a monetary policy reason to change the current approach.
(Reporting by David Milliken; Editing by Alex Richardson)