0% interest

[contractor79]

Papers are speculating we are going to have 0% interest next year.

So what should we do with our business savings? Won't this encourage many to pull money out of banks thus putting them in trouble and thus our own hard earned money at risk?!

[Francko]

Papers are speculating we are going to have 0% interest next year.

So what should we do with our business savings? Won't this encourage many to pull money out of banks thus putting them in trouble and thus our own hard earned money at risk?!

Exactly. It should motivate you to spend (and so pushing up the conomy) as you don't gain anything by saving, indeed you lose the inflation percentage. Nothing is casual.

[Cheshire Cat]

Exactly. It should motivate you to spend (and so pushing up the conomy) as you don't gain anything by saving, indeed you lose the inflation percentage. Nothing is casual.

But spend on what? Invest in some market or other to make money, or just buy a flat screen TV and a flash motor?

[Francko]

But spend on what? Invest in some market or other to make money, or just buy a flat screen TV and a flash motor?

Hookers and drugs. Anything that pushes economy higher than that?

[pmeswani]

Hookers and drugs. Anything that pushes economy higher than that?

The question is... will they be passing on the VAT savings onto their punters?

[chicane]

But spend on what? Invest in some market or other to make money, or just buy a flat screen TV and a flash motor?

Pay off your mortgage would be a good idea - don't suppose your repayments will be going down to 0%

[TimberWolf]

0% interest isn't a bad rate if inflation is negative.

[Alf W]

Interesting thing is that, although my mortgage provider has passed on all the rates cuts, they have recommended I keep my payments the same and enjoy a period of paying off the capital a bit faster. Suits me but it's hardly the general cash injection into the economy that El Gordo probably intended. I'm just wondering how many more mortgage providers are taking this opportunity to effectively build up capital in this way?

[NickFitz]

0% interest isn't a bad rate if inflation is negative.

WTWS. If you get 0% interest on your savings, but the economy is undergoing deflation, then the spending power of your money is increasing in exactly the same way that interest>inflation rate increases the spending power of your money in an inflationary economy.

Interesting thing is that, although my mortgage provider has passed on all the rates cuts, they have recommended I keep my payments the same and enjoy a period of paying off the capital a bit faster. Suits me but it's hardly the general cash injection into the economy that El Gordo probably intended. I'm just wondering how many more mortgage providers are taking this opportunity to effectively build up capital in this way?

Allowing mortgage providers to increase capital reserves is injecting cash into the economy - it means they are better able to provide mortgages to others, thereby sustaining the housing market. A "cash injection into the economy" doesn't just mean filling the tills at Argos.

[lilelvis2000]

This economic model is buggered.

At 0% I wonder if the banks will significantly up their fees for everything.

Or businesses will have to give up a share in exchange for a cash injection?