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 close to inevitable come January.
This unpalatable cocktail makes it likely that Britain will pip the US to the post when it comes to negative rates, but the Federal Reserve is also one small step away from crossing the interest Rubicon.
Jay Powell last week kicked the next upturn in rates further into the long grass – to the end of 2023 at least. President Donald Trump, if he is returned in November, will keep banging his Twitter drum for the “GIFT of negative rates”.
If we do go down that path, we at least have the advantage of having seen how the experiment has worked out across the Channel, since rates fell below zero in Europe in 2014 and Japan two years later.
Overall, things have turned out a bit better than the negative rate sceptics suggested they might. Bank lending picked up in Europe and unemployment fell. The region’s deflationary spiral was arrested. The sale of safes may have briefly risen, but savers didn’t stuff cash under the mattress. A reduction in bad loans helped banks offset the squeeze on margins that low rates, positive or negative, imply.
Sweden may have called time on its five-year dalliance with negative rates, but the European Central Bank’s hope that going below zero would show it had not run out of ammunition has, so far, been justified.