You are here: Home - Investing -

Bank of England considers case for negative interest rates

0
Written by:
26/02/2013
The Bank of England’s deputy governor Paul Tucker has raised the prospect of introducing negative interest rates to boost lending and support the UK economy.
Bank of England considers case for negative interest rates

Addressing MPs on the Treasury Select Committee, Tucker said the idea has been raised as a possible strategy to improve the economic recovery, the BBC reports.

“This would be an extraordinary thing to do and it needs to be thought through carefully,” he said. “I hope we will think about whether there are constraints to setting negative interest rates.”

The Bank rate has been at a historic low of 0.5% for close to four years, which has been detrimental to savers who have received paltry returns on their cash deposits.

Another option Tucker suggested was “possible extensions” to the Funding for Lending scheme, which offers up to £60bn of cheap funds to banks and building societies if they then lend the money to individuals and businesses.

Tucker’s comments come after a torrid few days for the UK, which was stripped of its AAA sovereign credit rating on Friday.

Ratings agency Moody’s became the first to downgrade the UK from AAA to Aa1, pointing to a growing government debt pile and expectations of a prolonged period of stagnant growth.

The move sent sterling to a two-year low against the dollar, while the government’s cost of borrowing crept upwards, heaping pressure on Chancellor George Osborne.

Tag Box

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

If one of your jobs this month is to get your finances in order, moving your savings to a higher paying deal i...

Coronavirus and your finances: what help can you get?

News and updates on everything to do with coronavirus and your personal finances.

Everything you need to know about being furloughed

If you’ve been ‘furloughed’ by your company, here’s what it means…

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
London first-time buyer numbers up 15% in 2012

The number of first-time buyers in the Capital rose by 15% last year, with 37,300 swinging onto the first rung...

Close