Whither negative interest rates? The City is watching Threadneedle Street carefully for signs about whether negative interest rates could be in the pipeline, reports Gurpreet Narwan in The Times. The Bank launched a review of the idea last summer, studying how they have worked in places such as Japan and Sweden. It has also been consulting with commercial banks to establish whether the policy is “operationally feasible”.
Lenders, who would lose out from lower rates, have highlighted the operational difficulties. The policy could prove counterproductive as banks move to protect their margins and rein in lending to the real economy, Mike Regnier of Yorkshire Building Society told The Guardian. Unprepared bank IT systems could also face a “Y2K-type” bug if they tried to handle negative rates.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The Bank won’t “shut the door entirely” on negative rates (it likes to keep something in reserve just in case), but it looks less inclined to use them. Expect lots more “creative ambiguity” from the central bank.
-
My 6.5% Nationwide regular saver is due to mature - what are my options?Nationwide’s 6.5% regular saver is due to mature for those who opened one last year. Here is what you can do now to make the most of your savings
-
Leading European companies offer long-term growthOpinion Alexander Darwall, lead portfolio manager, European Opportunities Trust, picks three European companies where he'd put his money
-
Leading European companies offer long-term growth prospects
Opinion Alexander Darwall, lead portfolio manager, European Opportunities Trust, picks three European companies where he'd put his money
-
How to capitalise on the pessimism around Britain's stock marketOpinion There was little in the Budget to prop up Britain's stock market, but opportunities are hiding in plain sight. Investors should take advantage while they can
-
London claims victory in the Brexit warsOpinion JPMorgan Chase's decision to build a new headquarters in London is a huge vote of confidence and a sign that the City will remain Europe's key financial hub
-
Reinventing the high street – how to invest in the retailers driving the changeThe high street brands that can make shopping and leisure an enjoyable experience will thrive, says Maryam Cockar
-
The consequences of the Autumn Budget – and what it means for the UK economyOpinion A directionless and floundering government has ducked the hard choices at the Autumn Budget, says Simon Wilson
-
The global defence boom has moved beyond Europe – here’s how to profitOpinion Tom Bailey, head of research for the Future of Defence Indo-Pac ex-China UCITS ETF, picks three defence stocks where he'd put his money
-
Profit from a return to the office with WorkspaceWorkspace is an unloved play on the real estate investment trust sector as demand for flexible office space rises
-
An “existential crisis” for investment trusts? We’ve heard it all before in the 70sOpinion Those fearing for the future of investment trusts should remember what happened 50 years ago, says Max King
