Are negative interest rates off the table?

Interest rates may have been slashed to the bone in the wake of the coronavirus crisis but the threat of a dive into negative rates has remained. This week, however, the Bank of England opted to stick at 0.1 per cent and upgraded its view on the economy for this year, saying GDP will only fall by a worst-in-a-century 9.5 per cent rather than a worst in 300-odd years 14.4 per cent. It also hinted that negative rates could do more harm than good, so does that mean a base rate below zero is off the table for the UK? On this week’s podcast, Simon Lambert and Georgie Frost discuss negative rates: what’s the point, do they have any positives and beyond costing savers’ interest how would they prove harmful? They also talk gold and why the price of the precious metal has soared 35 per cent this year, to rise above the $2,000 mark and whether it can keep going. For goldbugs it is a long-term store of value, a safe haven and a hedge against inflation, but will fears of bumper inflation at the end of the decade prove unfounded - and is part of the gold price sentiment-driven in the same way Tesla shares are? Buying gold and taking rates negative are seen as glass-half-empty measures, but are things brighter than we think? The housing market is doing better than expected, car sales have posted a surprise 11 per cent annual rise and Britain went mad for eating out at the start of the week, thanks to Rishi Sunak’s discount deals. Are these indicators of a V-shaped recovery? The job losses that continue to pile up will weigh on that and the team have tips on what to do if you are made redundant or it is a threat. And finally, if you do fancy splashing out and have your eye on a new car, you might think it is time go electric. Simon runs through What Car?’s new special awards for the best electric cars in every category.  

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