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Following the comments from the Bank of England (BOE) Chief Economist Andy Haldane over the weekend on examining the negative interest rates as a policy option, money markets have bolstered their expectations of interest rates going sub-zero in the UK for the first time ever.

As cited by Reuters, “interest rate futures contracts from December 2020 dipped into negative territory BOEWATCH on Monday. Futures contracts from December 2020 have dipped into negative territory while contracts maturing in June 2021 are pricing in as much as minus 0.03% in benchmark policy rates.”

In an interview with the UK Telegraph, when asked about the much-debated negative interest rates, the Bank of England’s (BOE) Chief Andy Haldane said, “there are other options beyond that, or alongside that, that we’re looking at as well.”      

Market reaction

The pound pays little heed to the above headlines, as GBP/USD tries hard to extend the recovery from two-month lows of 1.2076 reached in early Asia.

The spot, currently, trades at 1.2125, up 0.16% on the day.