Merv

[AtW]

as opposed to the overnight interbank rate

Yes, so now we have it - low interbank rates that are completely independent of central banks have forced their hand to keep rates at current negative (with inflation taken into account) rates.

Since that does not depend on BoE, they might as well jack up their rates without any problems.

[Freamon]

Yes, so now we have it - low interbank rates that are completely independent of central banks have forced their hand to keep rates at current negative (with inflation taken into account) rates.

Since that does not depend on BoE, they might as well jack up their rates without any problems.

The only problem is that if the BoE did do as you suggest, they would lose any remaining credibility they have, and the "BoE controls rates" smokescreen would be well and truly blown. So they are forever condemned to follow the market, I'm afraid.