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Negative interest rates: What would they mean for you?

The Bank of England has been discussing "negative interest rates" Photo: Press Association

The suits in charge at the Bank of England are thinking radical.

Today it has emerged that the concept of "negative interest rates" is being talked about. So, what is it ....who would be the winners and losers?

What is it?

The Bank of England would start to charge high street banks for looking after their money.

The idea is that this would encourage them to lend more out - rather than having it sat around costing them money to have it sat in the bank vaults.

The problem is banks can choose instead to hold cash in their own safes, rather than at the central bank - or they can convert it to cash-like investments.

It’s not been tried much - though Sweden had a go in 2009.

Winners:

It is hoped the winners would be small businesses that have complained that banks are not lending.

They could find it easier to get loans. It may also spur banks to loan more to house buyers.

Losers: Savers would be hit - as it is yet more downward pressure on interest rates.

Overall, this is a sign that the more traditional tools at the disposable of the Bank of England have now been depleted - alternatives are being sought and discussed.