One reason the US Federal Reserve shuns NIRP is because it threatens to destabilize the $2 trillion money market industry, but it is not the only reason. A paper last month for the San Francisco Fed issued a withering verdict on Europe’s experiment. “Both bank profitability and bank lending activity […]
rates
Forget negative rates – the Bank of England should admit it’s hit rock bottom
Third, the less interest deposits yield, the more an individual needs to save in order to sustain a given income. In a low interest rate environment, everyone draws in their horns. Negative rates are likely to be even worse. These factors all tend to slow economic activity. Little or no […]
Negative interest rates could put an end to free banking, experts warn
Negative interest rates could spell the end of free banking, experts warned after the Bank of England gave its clearest indication yet that the controversial policy could be introduced. The Bank has written to UK lenders’ chief executives asking them to set out their readiness for negative rates, raising the prospect of an unprecedented move below zero as the recovery begins […]
Spectre of negative rates sends a chill through Britain’s banks
In 1984 Birmingham-based Midland Bank, then one of the UK’s big four banking groups, made a radical decision that fundamentally changed Britain’s banking sector. Concerned about losing customers, it decided to ditch fees for cheques, statements and standing orders. Within a year it signed up to 450,000 new customers and […]
Bank of England official defends negative rates as recovery is ‘interrupted’
A new CBI survey has shown more than three -quarters of businesses want a deal to be agreed, with almost half of respondents saying that the impact of dealing with Covid-19 has hindered preparations for Brexit. Rob Wood, chief UK economist at Bank of America, said: “I expect the Bank […]
There are plenty of good reasons not to like negative rates
The difference between March and September can be measured on three fronts: Covid-19 looks no better than it did in the spring, if speculation about a half-term lockdown is anything to go by; the economy is looking into the abyss of a post-furlough employment crisis; meanwhile, a no-deal Brexit appears […]
What will negative interest rates mean for my mortgage, savings and investments?
Will the bank pay me to borrow money? The vast majority of mortgages in Britain are taken out on a fixed basis meaning most homeowners would not see their rate change if the Bank Rate were to fall below zero. The biggest beneficiaries would be those on tracker and variable […]
Bank of England moves a step closer to negative rates
The Bank of England took another step towards controversial negative rates on Thursday amid rising Covid infections and a looming unemployment crisis. The Bank’s Monetary Policy Committee unanimously voted to hold interest rates at their record low 0.1pc and kept the scale of its money printing programme unchanged at £745bn. […]
How no-deal Brexit will affect mortgage rates and house prices
Upsizers could have lower mortgage rates A silver lining for homeowners is that your mortgage rate could stay low for longer. In March, the Bank of England dropped the Base Rate to a record low of 0.1pc to boost the economy. The added economic uncertainty brought on by a no-deal Brexit would make […]
Next’s dividend and negative interest rates could shape the market this week
The FTSE 350 crept up 1pc last week whilst European and American markets fluctuated. Oil prices remained on the back foot at the end of a volatile week, staying below $40 (£31.20) per barrel, an important threshold for both oil stocks and major oil producing countries. Gold prices only shone intermittently […]