Rather Than "Normalizing", Central Banks May Have To Get More "Radical": BoE

Haldane pointed out that the Bank of England's next move might be to cut its rates below their record low 0.5 percent rather than proceed with a hike as widely expected. But even when interest rates do start to rise, he warned they could be pulled back again to near zero by future problems.

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Haldane said possible solutions included giving central banks higher inflation targets or making their emergency bond-buying programs a permanent part of their armory, although both options had their downsides.

He raised a third and even more radical possibility: governments issuing electronic rather than paper money, making it feasible for central banks to apply negative interest rates and break the current floor of borrowing costs at zero.