Ben Broadbent (pictured), deputy governor for monetary policy said the question of negative rates “had been thought about on and off since the financial crisis” and added it was “quite possible that more monetary easing would be needed over time”.
He also said contracting lender margins could encourage them to reduce lending rather than increase it.
“The committee are certainly prepared to do what’s necessary to meet our remit,” he added.
When asked if negative interest rates in America would prompt a “domino effect” in the UK, Broadbent said it had no direct impact on the bank’s decision making.
Broadbent added: “At these levels you have to think about the beneficial effects of cutting interest rates on demand.
“But also, the potential [impact] on the balance sheets of financial intermediaries and whether you cut rates beyond some limit, you actually risk doing more harm than good.”
Last week, the BoE decided to hold the bank rate at 0.1 per cent and warned of a recession in the first half of the year.