1. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Learn More.

UK interest rates cut to 0.25%

Discussion in 'Money Matters' started by Timmers, Aug 4, 2016.

  1. Timmers
    Online

    Timmers Well-Known Member Trusted Member

  2. DJB
    Offline

    DJB Active Member

    It would appear that the state owned banks are not going to pass on this rate cut to its customers.

    I cant see that a 1/4 percent cut will influence many people to go spend more, not within these uncertain times.
  3. ChoiAndJohn
    Offline

    ChoiAndJohn Well-Known Member Trusted Member

    Anyone that thinks that a rate cut makes no difference isn't investing in the right product or paying enough attention to their mortgage payment or retirement fund. Take a look at the prices of UK 10Y Gilt futures over the past 3 months.

    The primary intention of any rate cut is not to impacts savings and hence encourage withdrawal (since that just results in hoarding of real cash or alternative investment) the real impact is that it makes borrowing cheaper, reducing interest burden and hence freeing up cash for investment or expenditure.

    Very low to zero or even negative interest rates are nothing new. Switzerland, Denmark and Sweden are all experiencing negative interest rates, as is Japan. The US Fed funds target range is also in the 0.25% to 0.5% range. Some UK account holders are effectively already paying negative interest rates because they are being charged a monthly fee for banking which outstrips any interest that may be paid into their accounts.
  4. DJB
    Offline

    DJB Active Member

    Fortunately neither off which effects me :)
  5. ChoiAndJohn
    Offline

    ChoiAndJohn Well-Known Member Trusted Member

    Not having a retirement fund = fortunate?

    Whatever form of investment you have for your retirement is fundamentally affected.
  6. DJB
    Offline

    DJB Active Member

    Its a long story feller, so yes fortunate in one sense but maybe not in another.

Share This Page