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Would negative base rates make you invest your funds?

E

Employer

Member
Verified Member
As the Bank of England considers a radical move to negative interest rates to shore up the UK economy, would this make you invest your funds from a business point of view?

Many people believe that the once powerful base rate tool has lost its sparkle with fiscal stimulus now the only way to resurrect the UK economy. However, the UK authorities have spent hundreds of billions of pounds propping up businesses, individuals and the economy during the lockdown. Indeed, only yesterday the Bank of England confirmed that without its financial assistance the UK government was just days away from bankruptcy.

How can the economy recover in the short-term?
 
G

Goingitalone

Member
Verified Member
To be fair there are few businesses with significant capital to invest at this moment in time. It is more likely that businesses will be looking for additional finance especially with interest rates so low. Perhaps it may be time to refinance existing debt?
 
L

lookingforadvice

Member
Verified Member
I was just about to suggest that those who had surplus capital before the coronavirus have probably spent it. However, they may still have capital remaining from their bounceback loans or various payments made by the UK government? When you consider the terms of the bounceback loan, no repayments for 12 months and a favourable terms for the next five years, is this not money for nothing? Any business which has not applied for a coronavirus bounceback loan needs to have a think again.
 
AndreaBur

AndreaBur

New Member
I think that negative rates begin to apply when deposits cease to be a reliable investment of money. And it's not good that negative interest rates, which have always been considered an exceptional unconventional measure of monetary policy, are now used more often, including on global markets. I read that this measure forces banks and depositors to invest money in the economy, rather than keep it on deposits. Anyway, when it comes to investments, I consult with a specialist and recommend that you do the same. Frankly, I'm new to this, and if I've got it wrong, please correct me. Besides, if you can recommend a worthwhile blog about trading and investing to me, I will appreciate it. I've just recently read an article called 'how to start forex trading' and I want to learn more about it.
 
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