Banks asked to prepare for negative interest rates

All seems rather concerning. I'm hoping to have a house sale completed here sometime in the middle of the year, which would mean a considerable amount of money being transferred to the UK before I can buy something else.......
 
What exactly would that mean if I wanted to borrow more on my mortgage to do some home improvements?

I guess it just means that interest rates would be practically zero, right? They're already between 1%-2%?
 
London_Boro said:
What exactly would that mean if I wanted to borrow more on my mortgage to do some home improvements?

I guess it just means that interest rates would be practically zero, right? They're already between 1%-2%?
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That's the only thing I can think. More borrowing to stimulate the economy.
 
So in layman's terms as I'm not really clued up with money, good or bad?

Some may remember I contemplated investing in stocks, sacked that idea off as a lot of it was going way over my head.
 
Randy said:
So in layman's terms as I'm not really clued up with money, good or bad?

Some may remember I contemplated investing in stocks, sacked that idea off as a lot of it was going way over my head.
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I'm no expert but my understanding is that the lower the rate the better it is for borrowing and the worse it is for saving.

So I guess it would be good for getting a mortgage.

I suppose a downside could be that banks get spooked and want to hoard rather than lend so they make the borrowing criteria more difficult?
 
Randy said:
So in layman's terms as I'm not really clued up with money, good or bad?

Some may remember I contemplated investing in stocks, sacked that idea off as a lot of it was going way over my head.
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Impossible to know, its a bit of both dependant on your situation.

I think the only way i'd be taking any action at the prospect of this would be if I had an absolute wedge in the bank (talking 100's of thousands) and I'd be getting it in some investment trusts or fixed rate savers for a couple of years.
 
Colgates_shaving_foam said:
I'm no expert but my understanding is that the lower the rate the better it is for borrowing and the worse it is for saving.

So I guess it would be good for getting a mortgage.

I suppose a downside could be that banks get spooked and want to hoard rather than lend so they make the borrowing criteria more difficult?
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Exactly this. It's bad for savers, and better for borrowers. May well be good for the stock market too, as some people with cash may well turn to equities for a better return. (Although I guess largely happened already).

Mortgages will be cheap, but I'm sure most new ones will sufficiently above the base rate that you'll be paying. Some folk with old variable rate deals will be paying tiny amounts though!
 
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Cuthbert said:
Exactly this. It's bad for savers, and better for borrowers. May well be good for the stock market too, as some people with cash may well turn to equities for a better return.

Mortgages will be cheap, but I'm sure most new ones will sufficiently above the base rate that you'll be paying. Some folk with old variable rate deals will be paying tiny amounts though!
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I'm putting some cash in a managed portfolio within an ISA, and topping up in the new tax year.

The rest is getting gambled on some relatively high risk stocks, can see some decent gains coming (but not in current/ savings accounts).
 
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Get your savings in premium bonds for the next year or two, nothing is going to beat their 1% return anytime soon. My ISA is paying 0.01% at the moment!
 
Basically the banks will legally have to pay you to borrow money. The reason being they will be charging you to deposit money as it will cost them to do so.

my Mrs has being working on this for weeks and I said to her that it’s nonsense as surely nobody would expect a negative interest rate. Whether it’s in the contract terms or not surely it’s implicit that that would never happen.She countered with yes it would seem implicit but as we will have to charge for deposits as it will cost us to take them then we have to treat the customers fairly - we can’t have it both ways.

they have been talking about it for months and still have not come up with a solution!!
 
gravy173 said:
Get your savings in premium bonds for the next year or two, nothing is going to beat their 1% return anytime soon. My ISA is paying 0.01% at the moment!
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I’m no expert, but a managed portfolio does about 10%, even more if you take on a bit more risk.

You have to be able to accept that some years you may drop, but over time it will hammer savings.

Pensions are extremely efficient too, especially for higher rate tax payers, because of the tax breaks, but I wouldn’t want to wait until 55 to get my hands on the cash (at the earliest).
 
Randy said:
What would that mean for myself and my wife who are looking to buy a house in the next 5 years?
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Interest rates that banks offer will probably remain very much the same, maybe a little lower. In and around 1%. Margins are already strained. Most have clauses in tracker rates that they don’t pass on negative interest rate
 
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