@wolfgang59 saidInterest rates should be higher and probably would be if nations didn't want to keep forcing investment (even if it risky) and governments themselves did not have to pay interest on the money they borrow.
Good or bad?
How would you like to be paid interest on money you borrow?
https://www.bbc.com/news/business-54314971
I spoke about this about a year ago and most if not all people here considered it not an issue at all that interest rates were practically zero and might cross the 0% line.
However, apparently, a negative interest of has some kind of psychological impact on people where they suddenly consider it a bad thing, but it was already a really, really bad thing when the interest rate was for all intents and purposes 0%.
Have fun living in a society that aims to support the wealthy over the lower and middle class.
-Removed-It might be political suicide in most countries, but surely not in Britain, where many people work on the assumption that their primary investment is not savings but property. Anyone with a mortgage will surely be delighted.
Low and high interest rates both advantage different sectors of society. Why should the interests of savers be prioritised over those of mortgage holders?
-Removed-There’s a massive psychological / political difference between losing your house or not being able to borrow money at a low rate due to raised interest rates and having to move your spare cash into investment rather than savings.
Interest rates as mentioned have hovering around zero for a while now so if your intent on letting your money sit around for little or no return you’d be better keeping it with a local community savings cooperative. Your money will help your community with low to zero interest loans which you can also avail yourself of. The banks have probably got enough money already.
The biggest borrower in the UK is HM Government and they are going to need all the cheap money they can get
@kevcvs57 saidI don't think the government can borrow from itself at negative rates!
The biggest borrower in the UK is HM Government and they are going to need all the cheap money they can get
However ... the question of foreign investors borrowing from British banks
on negative or near negative mortgage interest rates is a good one.
@great-king-rat saidJapan, Switzerland, Sweden are all on negative rates.
It would make the world a better place, yes.
@wolfgang59 said“ LONDON (Reuters) - Britain sold a government bond with a negative yield for the first time on Wednesday, meaning the government is effectively being rewarded for borrowing after investors agreed to be repaid slightly less than they lent.
I don't think the government can borrow from itself at negative rates!
However ... the question of foreign investors borrowing from British banks
on negative or near negative mortgage interest rates is a good one.
It joins Japan, Germany and some other European countries in selling debt yielding less than 0%, reflecting the prospect the coronavirus pandemic will cause a severe global recession and bond-buying by central banks to mitigate its impact.
Wednesday’s auction saw 3.75 billion pounds of gilts maturing in July 2023 sold at an average yield of -0.003%.“
Looks like cheap money to me, government gilts is government borrowing. Hard to get this kind of deal with high domestic interest rates.
Either way it’s a smart move for the future of government spending I would think.