Natural for reserve rate to be reviewed

IT IS natural for policymakers to consider changing the rate charged on commercial bank deposits held at the central bank, Bank of England policymaker David Miles said yesterday.

The Monetary Policy Committee (MPC) member said he was open-minded about the policy but said it was natural it should be considered.

The MPC had considered changing the rate charged by the Bank on its reserves at its November meeting but did not make any changes.

Yesterday he said the future path of the policy should be determined by the amount of slack in the economy, which is “very substantial” at the moment.

Miles had voted for an extension to the Bank’s quantitative easing (QE) policy by £40bn.