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Uk Banks, set to be ready for negative rates.


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Uk banks, are readying for negative interest rates (5th of August, progress report), currently the recovery is propped up by furlough and grants. Once this ends, the economy will show its wounds.

Negative rates, will likely be introduced to stimulate homeowners or mortgage holders, into spending more.

House prices will rise again... to the moon they say. Coupled with, increased money supply & Q+E...

The banks, state this is possibly unlikely, an illusion to sell more mortgage products, now rather than after the change. 5-10 year fix anyone?

 

"Banks including Natwest Group Plc, HSBC Holdings Plc, Barclays Plc and Lloyds Banking Group Plc are close to completing the technical steps necessary to implement negative interest rates. The U.K. central bank in February asked for the work to be done by next month and is likely to deliver a progress report on Aug. 5."

https://www.bloomberg.com/news/articles/2021-07-26/u-k-banks-prepared-for-negative-rates-in-case-recovery-crumbles

Edited by Speed1987
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8 minutes ago, dpg50000 said:

Not gonna happen. Literally all the oldies would be lining up outside the banks to withdraw their money.

Like everywhere else that does it will be for balances over 50k or so in a bank 

Rest of free accounts being pushed into pay £10 a month but get "free" travel insurance and mobile phone insurance etc etc

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2 minutes ago, captainb said:
11 minutes ago, dpg50000 said:

Not gonna happen. Literally all the oldies would be lining up outside the banks to withdraw their money.

Like everywhere else that does it will be for balances over 50k or so in a bank 

Rest of free accounts being pushed into pay £10 a month but get "free" travel insurance and mobile phone insurance etc etc

 

I suppose that would be one way of doing it sneakily. Wonder how many pensioners have over £50K in the bank though?

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The big question is how banks would implement a negative interest rate without causing total chaos. I read an article a while ago where law society was concerned about the banks charging solicitors who hold clients money if there was a -ve rate.

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10 minutes ago, dpg50000 said:

 

I suppose that would be one way of doing it sneakily. Wonder how many pensioners have over £50K in the bank though?

Prob not that many and those that do would rather pay the fee than keep it under a mattress for burglar to find.

Regardless of what's said here it's already been implemented in several countries without the sky falling in.

You do large amounts only then persuade smaller amount account holders to pay a monthly fee for services

 

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2 hours ago, Speed1987 said:

Uk banks, are readying for negative interest rates (5th of August, progress report), currently the recovery is propped up by furlough and grants. Once this ends, the economy will show its wounds.

 

Would you really lend at - mortgages?

But I agree with the bit in bold.

Just think dissolved government in Tunisia, riots in SA and no doubt other problems.

As soon as even the FED starts to taper (not even increase rates) its going to go bad so fast that you are going to get nations go pop and thats going to create a deflationary suction which will give them justification to do that one last bit.

All a maybe though either way its not going to be good as loads of indebted nations where screwed before Covid and imagine unpaid lockdowns and curfews and no tourism and expats form rich countries coming home etc etc 

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27 minutes ago, dpg50000 said:

 

I suppose that would be one way of doing it sneakily. Wonder how many pensioners have over £50K in the bank though?

I'd say quite a lot. 50k is not a lot of money these days. Just look at all the money sloshing about, 50k+ cars are ten a penny, yes, many are on contracts, but you still need the income to pay. You never used to see masses of expensive cars on the roads in the North.

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18 minutes ago, Fromage Frais said:

Would you really lend at - mortgages?

But I agree with the bit in bold.

Just think dissolved government in Tunisia, riots in SA and no doubt other problems.

As soon as even the FED starts to taper (not even increase rates) its going to go bad so fast that you are going to get nations go pop and thats going to create a deflationary suction which will give them justification to do that one last bit.

All a maybe though either way its not going to be good as loads of indebted nations where screwed before Covid and imagine unpaid lockdowns and curfews and no tourism and expats form rich countries coming home etc etc 

Possibly not, maybe who knows? Either way I suspect BOE will go negative on rates, this year or very early 2022.

If mortgage products were at 0.5% from lenders, borrowing would increase substantially. Increasing prices.

Now the builders are out in force, there's construction everywhere, new builds, renovations, conversions etc...

Who is going to buy all these properties? There will be a slump in demand and this needs to be propped.

 

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2 hours ago, Speed1987 said:

Possibly not, maybe who knows? Either way I suspect BOE will go negative on rates, this year or very early 2022.

If mortgage products were at 0.5% from lenders, borrowing would increase substantially. Increasing prices.

Now the builders are out in force, there's construction everywhere, new builds, renovations, conversions etc...

Who is going to buy all these properties? There will be a slump in demand and this needs to be propped.

 

It now so expensive around here anything half decent over 150m2 is 500k+ and the wages are not great.

I agree with you...  its tapped out here so either the credit will get cheaper or the prices will have to come down now the stamp duty is about to click back in.

 

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Nationwide offering a 5 yr fixed at 1.2% for existing customers with no arrangement tempted as on lifetime tracker interest only for last few years currently paying 2.1%  Have monitored for last year and this is the lowest can it go sub 1%?

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11 hours ago, Social Justice League said:

IR's will be rising imo.  Take your poison.

IR's at 6%+ or rampant inflation where serfs can't afford to eat or pay bills.

My position is firmly set, holding out for lower rates.

Or increased wages, with a 0.1 BOE rate, either way I do not see rising rates.

They won't care if people cannot afford to eat, that's their problem. There's already foodbanks everywhere. I think most will chose the option to adjust food consumption over losing their home, due to high rates.

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11 hours ago, coypondboy said:

Nationwide offering a 5 yr fixed at 1.2% for existing customers with no arrangement tempted as on lifetime tracker interest only for last few years currently paying 2.1%  Have monitored for last year and this is the lowest can it go sub 1%?

Will they let you go IO on that rate?

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6 hours ago, PeanutButter said:

Will they let you go IO on that rate?

no but looking to go onto repayment to 75 to keep costs down and then overpay as and when to clear much sooner was hoping to semi-retire/retire next year but waiting on furlough decision which is imminent.

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There will be queues round the block of people demanding their money out of savings accounts.

I presume, therefore, that we have legislation which allows banks to refuse to give people their own money back?  Legalised theft in other words?

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On 31/07/2021 at 12:58, captainb said:

Like everywhere else that does it will be for balances over 50k or so in a bank 

Rest of free accounts being pushed into pay £10 a month but get "free" travel insurance and mobile phone insurance etc etc

Yeah they've been salivating over charging for current accounts for years.  

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44 minutes ago, kzb said:

There will be queues round the block of people demanding their money out of savings accounts.

I presume, therefore, that we have legislation which allows banks to refuse to give people their own money back?  Legalised theft in other words?

People will spread their wedge out thinner to stay under the threshold.

Negative rates in Switzerland meant the cash savers did this or moved to the kantonal banks which don't charge -ve upto chf1 million on deposit.

Some savings accounts only allow X amount per year or X amount ( say 4) withdrawls per year though.

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1 hour ago, kzb said:

There will be queues round the block of people demanding their money out of savings accounts.

I presume, therefore, that we have legislation which allows banks to refuse to give people their own money back?  Legalised theft in other words?

It's not your money once you've handed it over to a bank.

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1 hour ago, zugzwang said:

It's not your money once you've handed it over to a bank.

Lol- it's not your money in the first place.

I heard an interesting piece about MMT the other day. Would you describe yourself as an MMT'er?

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