No 'significant barriers' to zero per cent interest rates

The UK is not far from zero per cent interest rates, it has been claimed.

This could be good news for any self builder who took out a base-rate tracker deal when arranging their financing.

Jonathan Loynes, chief European economist at Capital Economics, says the Bank of England monetary policy committee appears "anxious to get interest rates down to very low levels very quickly".

The US Federal Reserve has recently decided to cut interest rates to close to zero and Mr Loynes claims that there does not appear to be any "insurmountable technical obstacles to interest rates falling to zero in the UK".

Once interest rates are reduced to below one per cent, the Bank of England may turn its attention to other forms of monetary loosening, such as printing new money, he argues

It was recently announced that the monetary policy voted nine to zero to reduce rates by one percentage point, to a 57-year low of two per cent.