Quote:
Originally Posted by jfman
I can't see anyone taking the risk of shovelling thousands of pounds under the bed to save themselves losing a fraction of one per cent on interest rates - if that was passed on to the savings end of the market.
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A safety deposit box would be a better option if you can still get one for free.
I've since looked into this a little more. If we do go into negative interest rates, some banks have said that their systems cannot implement it and it doesn't look very good either, so they are more likely to recoup the money by increasing bank charges or reintroducing charges for running our current accounts.
Those with mortgages etc would, in effect, start getting paid for their debt. These payments wouldn't be paid to them, but knocked off the mortgage/loan so that they pay back less than they borrowed.
I wonder if the Government has had a word in the ear of the Bank of England to do this in order that they will be able to get rid of some of the debt that they have racked up?
One of the first things Thatcher did in 1979 was to hike up interest rates. There were lots of complaints from individuals & industry; she retorted by saying that high interest rates are good for some people, namely retired people with savings. It must follow then that if this situation is reversed that the losers would be mainly pensioners, many who traditionally vote Tory.
That's one downside to democracy, in order to stay in power Governments sometimes do what the people want instead of what's the sensible or correct thing to do.