© Yui MokThe Bank of England held interest rates at 0.1% (Yui Mok/PA)
The Bank of England has told lenders to get ready for potential future negative interests rates but stressed such a move was not imminent despite slashing 2021 growth forecasts.
In a highly-anticipated update on its consultation into the feasibility of below-zero rates in the UK, the Bank revealed it believed it was "appropriate" to begin preparations for adding negative rates to its toolkit.
It came as the Monetary Policy Committee (MPC) voted to keep rates on hold at 0.1% and keep its quantitative easing programme unchanged at £895 billion.
© Provided by PA MediaAndrew Bailey is governor of the Bank of England (Tolga Akmen/PA)
Forecasts alongside the decision showed the Bank slashed its UK economic growth outlook this year from 7.25% to 5% while increasing its prediction for next year from 6.25% to 7.25%.
It warned gross domestic product (GDP) - a measure of the size of the economy - is set to tumble by around 4% in the first quarter due to the third national lockdown.
However, it signalled the UK will avoid a double-dip recession, as defined by two successive quarters of falling output, predicting marginal growth at the end of 2020.