Asked whether the central bank would consider using negative rates in the UK, Andrew Bailey, said: “As you approach the zero bound, the degree or convention of stimulus does reduce.

“You would get further issues as you go negative, that barrier or restriction would get worse because you would obviously get big issues for some part of the banking system.” 

The comment was made during a Financial Times webinar, and comes after deputy governor, Ben Broadbent, earlier this week said negative interest rates “had been thought about on and off since the financial crisis”.

He added it was “quite possible that more monetary easing would be needed over time”.

At the beginning of the month the bank decided to hold the base rate at of 0.1 per cent, the lowest it has ever been. 

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