What would negative interest rates mean for your money?

There has been much talk of the Bank of England introducing negative interest rates. John Stepek explains why they might do that, and what it would mean for your money.

Gold bar on euro banknotes © Michael Gottschalk/Photothek via Getty Images
In a world of negative rates, gold beats cash
(Image credit: © Michael Gottschalk/Photothek via Getty Images)

The Bank of England is being a real tease about negative interest rates. Emissions from various members of the central bank’s policy committee suggest that they aren’t desperate to go negative – but nor are they ruling it out. And now we hear that the head of the Prudential Regulation Authority (the financial watchdog that keeps an eye on the banks) has written to lenders, asking how they’d cope if negative rates did come in.

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John Stepek

John Stepek is a senior reporter at Bloomberg News and a former editor of MoneyWeek magazine. He graduated from Strathclyde University with a degree in psychology in 1996 and has always been fascinated by the gap between the way the market works in theory and the way it works in practice, and by how our deep-rooted instincts work against our best interests as investors.

He started out in journalism by writing articles about the specific business challenges facing family firms. In 2003, he took a job on the finance desk of Teletext, where he spent two years covering the markets and breaking financial news.

His work has been published in Families in Business, Shares magazine, Spear's Magazine, The Sunday Times, and The Spectator among others. He has also appeared as an expert commentator on BBC Radio 4's Today programme, BBC Radio Scotland, Newsnight, Daily Politics and Bloomberg. His first book, on contrarian investing, The Sceptical Investor, was released in March 2019. You can follow John on Twitter at @john_stepek.