The Bank of England has slashed interest rates to 0.1%
Mar 19, 2020 15:25:54 GMT
mark and Harland Kearney like this
Post by stuartassetzcapital on Mar 19, 2020 15:25:54 GMT
This is such a fast-moving situation, and as we expected interest rates have been dropped again to near zero. I doubt the committee has left the meeting room since the last time rates were slashed, and will now likely be debating when to take rates negative and by how much.
-1% looks very possible in the next month, and frankly this has been on the cards since last year. It was only a matter of time and the pandemic has meant that time is now.
This will decimate seriously impact savers' returns savings and if rates go negative then businesses and higher net-worth individuals could be hit by what is effectively a tax on their bank savings balance. To avoid this they many will seek to invest their money, accepting higher risk in return for yield. Our type of peer-to peer lending is one option, which also has the benefit of supporting the country's economy and smaller businesses. That's the point of negative rates.
Borrowers on variable rates will see lower borrowing costs and new loans have a chance of being cheaper. but in a heightened risk environment those borrowing costs would be lucky to stay where they are.
-1% looks very possible in the next month, and frankly this has been on the cards since last year. It was only a matter of time and the pandemic has meant that time is now.
This will decimate seriously impact savers' returns savings and if rates go negative then businesses and higher net-worth individuals could be hit by what is effectively a tax on their bank savings balance. To avoid this they many will seek to invest their money, accepting higher risk in return for yield. Our type of peer-to peer lending is one option, which also has the benefit of supporting the country's economy and smaller businesses. That's the point of negative rates.
Borrowers on variable rates will see lower borrowing costs and new loans have a chance of being cheaper. but in a heightened risk environment those borrowing costs would be lucky to stay where they are.
