How the cut in the UK Central bank interest rates is going to help the current economic crisis?
I would like to know the positives to this decision ! Though an economic interpretation would be ideal !
Cutting interest rates can produce an increase in the money supply, which has effectively been reduced by the credit crunch. The threat is deflation, which is the opposite of inflation, and can be just as damaging (deflation can lead people to postpone spending plans for luxury goods as prices are falling, which can lead to the prices falling further and businesses collapsing).
If this cut in interest rates doesn’t work, the UK Central bank may become tempted to use “quantative easing” as used in Japan, to directly increase the money supply (e.g. By printing money) and so prevent deflation.
What bank has the highest interest rate (UK banks)?
I’m 16 years old and I was hoping to find out which bank has the highest interest rate. Now that I have a monthly income I was hoping to boost my money as much as possible.
I’m sorry I don’t know a lot about banks but does anyone know?
Google “Best Savings Rates” or use the link below
Are interest rates for UK credit cards too high? Should the Government force the rates down?
How can banks get away with very high interest rates on credit cards, when the Bank of England interest rate is almost zero? Should the UK Government make the banks reduce their rates – or would that be unfair on the banks?
The first answer is easy. They can get away with it because people will pay it.
The second answer is a little more confusing. The government is doing you a favor by not lowering the interest rates. Look at it this way – are you more likely to spend or not spend knowing your interest payment is going to be as high as your principal payment? If the government were to force down interest rates, people would get themselves deeper and deeper into debt. You would find yourself in a credit crunch such as the one that just destroyed the housing market in the US. That was a direct result of government forcing banks to lend at low rates.
Why is the European Central Bank keeping interest rates at 1.5% when the UK reduced rates to 0.5% long ago?
6th October 2011, ECB decides to keep rates at 1.5%. When the Eurozone is in such dire straits why not reduce interest rates to encourage growth and reduce the real value of government debts through inflation? The Eurozone rate of inflation (from what I heard on BBC TV just now) is only 3% whereas in the UK it is over 4%. I think I’m right to say that the central bank of the UK (bank of England) and the European Central Bank should have similar goals but are pursuing very different strategies. I’d be very interested to hear an explanation of this difference in strategies and whether I’ve misunderstood the situation. Thanks for any help.
It is a genius strategy.Most of speculators have expected that ECB will save the banks in the Euro zone by reducing short term(1 year) rate to increase liquidity in case that Greece would have missed the due date. But the ECB moves to provide unlimited fund instead and keeps the rate untouched.This will keep the Euro exchange rate stable which will be good for growth.The bank of England and ECB have been competitors for awhile.But this time I do agree that ECB was right.
Which UK bank has the highest interest rates for savings accounts?
I’m a student, and I’d like to open a savings account to transfer money to from part time work. A high interest rate would really help the money grow.
Do a comparison at http://www.moneysupermarket.com/savings/
You can chose to look at all savings accounts, or regular savings (if you can decide on a fixed amount to pay in weekly or monthly). Or easy access, or whatever combination suits your needs.
Read the info carefully Some accounts need a fixed amount to be deposited regularly, and some charge fees, and some allow very limited access, some require you to have another account with them first, and some give decent interest up to a certain level of savings balance, and little or none for higher amounts. And some have issues about in-branch transactions, or telephone / post / internet banking.
Choose well. You want the best you can find, and if it is close enough to be able to visit over the counter if you need to, all the better.
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