The Bank of England (BoE) has been warned that cutting the interest rate below zero may fail to boost the economy because lenders would increase mortgage costs in response. Mike Regnier, chairman of the Building Societies Association, said he fears negative rates “would have the opposite effect from supporting the economy”. He believes banks would not want to charge consumers negative interest, saying: “I can’t see a scenario where we’d charge our retail savers to leave their deposits with us”, but said they “would need to protect their net interest margins”, with this likely to mean lending rates would rise.
Read more: The Guardian
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