Are base rate reductions having any impact on the UK economy?



Active Member
As the Bank of England ponders the idea of moving UK base rates into negative territory, many are wondering whether base rate reductions are having any real impact on the UK economy. The idea of negative interest rates is simple, this encourages banks, businesses and individuals to invest their money rather than save it. In all honesty, the UK economy is in need of a fiscal boost as the once powerful impact of base rate reductions has been reduced significantly in recent years.


The days when interest-rate reductions grabbed the headlines and prompted people to rush out to borrow money are long gone. There are more pressing concerns such as employment security and the threat of a potential second wave of the coronavirus. There continues to be talk of a move to negative base rates in the UK but what good would it do really? Is the realistic difference between 0.1% base rates and -0.3% base rates going to make a big difference?


Opposition politicians seem to be surprised that the UK economy is tanking and not bouncing back straightaway. Surely now is the time for all political parties to pull together for the good of the country rather than fighting amongst each other trying to score brownie points. We have constant independence chatter in Northern Ireland, Scotland and even Wales seems to have joined the party.