Negative interest rates are a crazy idea – could they happen here?

Matthew Lynn explains why negative interest rates would wreck Britain's economy.

For anyone worrying about how to meet the next mortgage payment, or how they will ever borrow enough to buy a shoebox masquerading as a flat in east London, here is some cheering news. A bank in Denmark is now paying customers to borrow money.

Nordea Credit is now charging some mortgage borrowers a negative interest rate on their loans. In effect, instead of you paying the bank, it pays you (although there are still some administration charges it's a bank, after all). This is the through-the-looking-glass world of negative interest rates and it may not be long before it arrives in the UK.

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Matthew Lynn

Matthew Lynn is a columnist for Bloomberg, and writes weekly commentary syndicated in papers such as the Daily Telegraph, Die Welt, the Sydney Morning Herald, the South China Morning Post and the Miami Herald. He is also an associate editor of Spectator Business, and a regular contributor to The Spectator. Before that, he worked for the business section of the Sunday Times for ten years. 

He has written books on finance and financial topics, including Bust: Greece, The Euro and The Sovereign Debt Crisis and The Long Depression: The Slump of 2008 to 2031. Matthew is also the author of the Death Force series of military thrillers and the founder of Lume Books, an independent publisher.