Negative interest rate discussed

NPowerUser

Just keep paying those mortgages down folks, overpaying is the new saving!

DotMatrix

NPowerUser wrote: »

Just keep paying those mortgages down folks, overpaying is the new saving!

Yep, and just think about all that tax you would be saving on too.

talexuser

The talk of negative savings rates is just hooey. Rates would just be 0.1 or 0.15% and then maybe the thrifty would get a collective voice and some political clout?

talexuser

According to news Merv was outvoted at the last Policy Setting meeting proposing more QE. He is obviously a man who thinks that since digging has not got him out of a hole yet, more digging eventually will.

System

How likely is this? Is this not a very random idea that has been plucked out of the air, or is this actually likely to happen?

I have savings but unfortunately I have no solid working career, I am always in and out of work.

I have been sensible with my money.....

I cannot claim Jobseekers or Housing benefit as I have too much savings. Therefore the £50 I get a month in interest is fairly essential for me.

Having no interest rate or even having to pay to have savings would be another shot to the throat.

Having savings especially in my case is a bad thing!!!!!!

It's bloody ridiculous.

jimjames

JoeCrystal wrote: »

And of course, if the Bank does negative rate, then tracker rate would go even higher! So when the rate goes back to positive, it would cost you even more!

I don't understand? If my tracker is base + 1% surely it goes lower if the base rate is below zero. Have I missed something?

JoeCrystal

jimjames wrote: »

I don't understand? If my tracker is base + 1% surely it goes lower if the base rate is below zero. Have I missed something?

No, what I meant that that bank would like to keep getting same margin so at the moment, you get base + 1.88%. Supposing Bank of England reduce it to -0.50%, what's to stop them from increasing the tracker rate to 2.88%?

EDIT: I meant as applying for new mortgages...

Cheers,
Joe

lisyloo

hat's to stop them from increasing the tracker rate to 2.88%?

Joe - they can increase new rates being offered to whatever they want, but I don't think they can't change existing mortgage rates. It's a binding contract.
Mine lasts until 2018 at BOE+0.49 and I don't think there is anything they (the bank) can do to change that.
Some may say they can "call in" mortgage but if they did try that then there would be a massive loss of faith in the banking system and possibly a run on the banking system, so that remains a negligeable likelihood even if it is technically possible.

Just seen your EDIT - I agree.
I think some of us are talking about existing mortgages.

worldwheeler

Oblivion wrote: »

but I can't see it going below Zero for us plebs ...

Us plebs already HAVE negative interest rates. Inflation, real inflation on life essentials like food and energy, is running somewhere north of 7% and savings are getting 2.5% after tax. THAT IS NEGATIVE interest on savings.

The pound devalued last week against the worlds currencies, house values are falling, fees are rising, the world reserve currency empire is lurching, that empire is launching into wars all over the globe, gold and silver is being bought hand over fist while their price in fiat is controlled by avalanches of paper derivatives, natural resources around the globe are being grabbed by force..... these are all clear signs that the end of an empire, end of a power system, end of a reserve currency is under way.

Interesting times, or no interest times. One things for sure the collapse/change/transition will not be good for ....Us plebs.

Oh this wont happen, tomorrow will be no different to yesterday. Yeah any change will be telegraphed, fully explained and announced ?????Na, it will be covered up, obscured and hushed up.Extend and pretend. We are now in an implementation of an unsustainable cover up system(QE) of an unsustainable system (fiat debt based money requiring infinite growth in a finite world)

talexuser

dburford9 wrote: »

even having to pay to have savings

Banks would have to pay the Central Bank, it would not apply to private savings. The point is to make it more profitable for banks to lend to business than just get interest from the BOE - thus get the economy going. Panic measures in other words.