Bank of England deputy governor suggested today that negative rates could be used to push banks harder to lend money.
The bank rate - the rate of interest the central bank lends to the banking system - has been at a record low of 0.5 per cent for almost four years to try and encourage banks to lend.But this hasn't really happened, so going negative would mean charging banks to hold their money.
Paul Tucker told MPs on the Treasury committee: "This would be an extraordinary thing to do and it needs to be thought through carefully."
He said it was an idea he had raised as one of the possible alternative ideas to boost the economy which faces a triple-dip recession after its longest double-dip for 50 years.
Foreign Minister Alistair Burt's admission that the Cameron government has "supported" a survey of attitudes to US drone strikes in Pakistan's tribal areas amounts to a tacit admission of British involvement.