Bank of England ‘will try anything’ to rescue economy

The Bank of England will be willing to try “virtually anything” to offer debt help to lenders and borrowers, it has been claimed.

Jonathan Loynes, chief European economist at Capital Economics, stated that the Bank will consider a wide range of policy stimulus measures to aid the economy.

He predicted that interest rates will reach around zero over the coming months, something that could help people manage their debts.

Commenting on the Bank’s monetary policy committee (MPC), which is in charge of setting the base rate, he said: “Once interest rates get close to zero they will switch their focus … exactly what form they will take is as yet unclear.”

Mr Loynes claimed that the MPC may embark on a “dual strategy” of buying bonds from the government and corporate sector to help boost the amount of finance available to banks.

It comes after Charles Davis from the centre for economics and business research predicted that the base rate will fall to zero or 0.25 per cent.

By Jamie Price