PeteMorris Posted May 22, 2012 Share Posted May 22, 2012 I'm slightly puzzled that the IMF Chief (Christine Lagarde) suggests Britain should (amongst other helpful suggestions) cut our interest rates. I might be wrong, but it currently stands at half of one percent. How much lower can you go? Can it go negative? I presume that means a bank would charge you interest to deposit your money with them? :huh: Link to comment Share on other sites More sharing options...
truman Posted May 22, 2012 Share Posted May 22, 2012 Who is actually only paying half a percent? Link to comment Share on other sites More sharing options...
PeteMorris Posted May 22, 2012 Author Share Posted May 22, 2012 Who is actually only paying half a percent? Well that's a good question. Havn't the building Society's just increased their rates for mortgages? It seems the BOE set the rates and everyone else ignores it and sets theirs at whatever they like. It's certainly not Joe Bloggs in the street paying half a percent! Link to comment Share on other sites More sharing options...
splodgeyAl Posted May 22, 2012 Share Posted May 22, 2012 Who is actually only paying half a percent? Banks mostly. Link to comment Share on other sites More sharing options...
truman Posted May 22, 2012 Share Posted May 22, 2012 Banks mostly. I'm not sure they do...do you know for definate? Link to comment Share on other sites More sharing options...
splodgeyAl Posted May 22, 2012 Share Posted May 22, 2012 I'm not sure they do...do you know for definate? No, I don't to be honest. But the IMF / BoE usually talk about the "Bank Rate" *not* the retail interest rates. I'd imagine they couldn't dictate the retail rate due to competition laws, anyway? Link to comment Share on other sites More sharing options...
truman Posted May 22, 2012 Share Posted May 22, 2012 No, I don't to be honest. But the IMF / BoE usually talk about the "Bank Rate" *not* the retail interest rates. I'd imagine they couldn't dictate the retail rate due to competition laws, anyway? I think the 1/2 % relates to the ineterest the BoE charge..the interbank rate is likely to be higher..although I could be talking tosh.. Link to comment Share on other sites More sharing options...
splodgeyAl Posted May 22, 2012 Share Posted May 22, 2012 I think the 1/2 % relates to the ineterest the BoE charge..the interbank rate is likely to be higher..although I could be talking tosh.. Yeah. I think that's what I meant Link to comment Share on other sites More sharing options...
studentbob Posted May 23, 2012 Share Posted May 23, 2012 Interest rates are set at 0.5% for one reason only - so the banks can deleverage. They have so many bad debts that they couldn't possibly pay them off with their normal operating profits. That is why the central banks are sticking with low interest rates. Of course Mervyn King and his cronies argue that what they are doing is trying to revitalise the economy by ensuring that there is a cheap money supply available, when in effect all they are doing is providing cheap money for banks to pay off bad debts, as very little or none of the money is filtered into the real economy. When Lagarde suggests cutting interest rates what she really means is she thinks another round of QE is inevitable. More free money for the banks. Link to comment Share on other sites More sharing options...
MrSmith Posted May 23, 2012 Share Posted May 23, 2012 I'm slightly puzzled that the IMF Chief (Christine Lagarde) suggests Britain should (amongst other helpful suggestions) cut our interest rates. I might be wrong, but it currently stands at half of one percent. How much lower can you go? Can it go negative? I presume that means a bank would charge you interest to deposit your money with them? :huh: It puzzles me too, the banks got in a mess for lending money, the economies of the world were stimulated because banks lent money which people could spend, and governments wanted banks to lend money so people could spend it. It was spending borrowed money that made economies grow and ultimately the banking crisis. So the answer to the mess is to lend more money to stimulate the economy again. Link to comment Share on other sites More sharing options...
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