A chief economist said the UK should scrap cash all together

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Mr Haldane said negative interests could be necessary to protect the UK economy and would help the Bank of England fight off the next recession.

The Bank of England's radical thinker argues such a move would give the bank new flexibility in the event of another economic downturn.

Andy Haldane has proposed that Britain should abandon our centuries-old system and opt for a government-backed digital currency.

Interest rates stay on hold and not set to rise any time soon

He added that a switch to digital would help the bank to manage inflation by enabling it to bypass the current constraint against lowering rates below zero.

Mr Haldane, one of the Bank's nine interest rate setters, said that the "the balance of risks to UK growth, and to UK inflation at the two-year horizon, is skewed squarely and significantly to the downside".

As a result, "there could be a need to loosen rather than tighten the monetary reins as a next step to support UK growth and return inflation to target".

Traditional economists have resisted cutting rates below zero because when the returns on savings fall into negative territory, it encourages people to take their savings out of the bank and hoard them in cash.

This could slow, rather than boost, the economy. However, Mr Haldane argued getting rid of cash would remove that option.

He said: "What I think is now reasonably clear is that the payment technology embodied in [digital currency] Bitcoin has real potential."

Mr Haldane's comments reflect policymakers' nervousness that they lack reliable tools to stimulate spending. Other experts have also argued that cash restricts central bank's ability to boost a depressed economy.