In reply to bullybones:
> Unless, of course, negative interest rates mean negative interest on debt...we live in strange times but not that strange...
Indeed, not that strange. A couple of friends have tracker mortgages that track below the base rate, so, in theory, would be in a negative interest scenario. The banks stop reducing the interest at zero, so they have interest-free mortgages, as opposed to negative interest mortgages.
To the OP, from a negative bank base rate point of view, the bank requires banks to deposit money with the BoE as a cash buffer. It pays the banks base rate on that money.
However most banks are currently hoarding cash considerably above the minimum amount they are required to hold, as we are in a time of uncertainty, and, like an individual, when things are uncertain, they play safe and don't take risks. If they don't lend it, then people can't borrow it.
By charging the banks for depositing money (by making the interest rate negative) the BoE is trying to make the profit motive outweigh the caution motive.