By John Smith • 03 September 2020 • 15:39
THE Governor of the Bank of England Andrew Bailey appeared before the Treasury Select Committee via zoom to discuss the financial outlook for Britain and did not rule out the possibility of introducing negative interest rates.
Although borrowers from banks and credit cards haven’t any reflection in commercial interest rates charged, the current UK interest rate is just 0.1 per cent so it can hardly go any lower without becoming negative.
There are mixed views over the effectiveness of below zero interest rates (which Japan followed for several years due to low inflation) but proponents say that if the banks have to pay to keep money on deposit with the central bank then they will be more inclined to lend it out to businesses.
The Governor told MPs, “It’s in the box of tools, we’re not planning it at the moment, we’ve got no plans to use it imminently but it is in the box.”
The Bank wants to see inflation hit 2 per cent this year but with so many problems of shops and restaurants closing and industry cutting back prices are generally static or even dropping so some form of stimulus is needed.
Share this story
Subscribe to our Euro Weekly News alerts to get the latest stories into your inbox!
By signing up, you will create a Euro Weekly News account if you don’t already have one. Review our
Married to Ophelia in Gibraltar in 1978, John has spent much of his life travelling on security print and minting business and visited every continent except Antarctica.
Having retired several years ago, the couple moved to their house in Estepona and John became a regular news writer for the EWN Media Group taking particular interest in Finance, Gibraltar and Costa del Sol Social Scene.
Share your story with us by emailing [email protected], by calling +34 951 38 61 61 or by messaging our Facebook page www.facebook.com/EuroWeeklyNews
Your email address will not be published. Required fields are marked *
Download our media pack in either English or Spanish.