Negative interest rates would not help Covid economy, Bank of England told

News, market analysis, investment scam prevention tips and more ✔️ Your source for latest asset management news and information. This magazine is crafted specifically for those who are interested in diving into the global asset management world. Cutting the UK’s official interest rate below zero would fail to boost Britain’s Covid-stricken economy because lenders would increase mortgage costs in response, the Bank of England has been told.The leading representative of Britain’s building societies said high street lenders were not in a position to handle negative interest rates, had computer systems that were ill-equipped and that the move would be counterproductive for the British economy.Mike Regnier, the chief executive of Yorkshire building society and the chairman of the Building Societies Association, said negative rates would lead big high street lenders to push up their mortgage rates to protect profitability – hurting consumers and the wider economy.“I fear this would have the opposite effect from supporting the economy, as rates would go up for borrowers as banks protect their margins,” he told the Guardian.Threadneedle Street will on Thursday reveal the findings from its work to assess the UK’s readiness for negative interest rates, as it considers ways to boost the economy amid the intensifying fallout from Covid-19. Negative rates would involve charging commercial banks and building societies to deposit funds at the central bank – with the aim of encouraging additional lending and cheaper borrowing costs.The Bank of England To keep reading about Negative interest rates would not help Covid economy, Bank of England told, Click on the link. Seoul, Korea
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