The Bank of England’s (BoE) Monetary Policy Committee (MPC) voted unanimously to maintain the Bank Rate at 0.1%, it was announced. The Bank also said it would maintain its current quantitative easing programme at £745 billion. It came as the BoE warned that it expects UK unemployment to jump by 7.5% by the end of the year. Andrew Bailey, Governor of the Bank of England, confirmed that the bank is not looking to introduce negative interest rates at the moment. However, negative interest rates were not ruled out. Following the announcement, there continued to be speculation about the potential for negative interest rates in the coming months. This is something which Matthew Yeates, Head of Alternatives & Quantitative Strategy at 7IM, has also addressed. According to Mr Yeates, consumers in the UK could have a part to play in terms of whether the Bank of England makes the move to negative interest rates. Commentators, though, believe looking at the bond markets suggest there may be more to come though. The yield on a five year gilt, which can be thought of as the expectations for the average base rate over the next five years, currently sits in negative territory. Essentially the market is saying interest rates in the UK will go negative at some point. From an investment standpoint negative bond yields pose a huge problem though. It means an allocation within portfolios to traditional UK government bonds is expected to deliver a negative expected return (at least for those maturing in the next five years). This is part of the rationale for fund managers preferring to look at alternative assets and bonds issued by corporates to provide diversification in portfolios.