Negative Interest Rates? The scare of the ever-dipping values.

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Just like all over the world, interest rates are going down in the United Kingdom, causing a lot of issues in the financial services industry. The Bank of England, a large bank in the UK, said last week it had written to all banks and building societies to check whether they could pass on negative interest rates if the central bank cut the cost of borrowing below the current base rate of 0.1%. Negative interest rates would not only impact banks' profits, but it also will gravely harm the consumer. 

It would hurt the banks as they depend on these mortgage loans to stay afloat. Since the rates are so low, they cannot make much revenue from the loans that they issue. This will hurt the consumer as they will have to pay the banks extra due to the negative interest rates. They not only will not make any interest money in their accounts, but also may have to pay the bank in the event of negative rates. 

The banks are thinking about artificially making the rates 0% to facilitate foreign investment, but that is unlikely to happen, according to Andrew Bailey, the governor of the Bank of England. 

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