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Is the UK ready for negative interest rates?

Negative interest rates in the UK are no longer impossible. They’re a very real prospect that will affect unprepared banks and institutions. As the Bank of England warms to negative rates as a potential economic solution, banks, investors, businesses and other stakeholders need to prepare.

While a move below zero may be an unwelcome experiment for markets, it could provide a significant opportunity for those who take the right steps now. Negative interest rates are nothing new: They’ve been used with varying degrees of success across Europe and in Japan. There may be mixed support for negative rates in the UK, but we may have little choice but to adapt to global trends.

Banks and boards can no longer ignore the possibility that interest rates may go below zero. Whether it happens or not, we’ll certainly see low rates for longer, and businesses should accelerate change to be ready. The challenges may have changed and the urgency increased, but the imperatives remain the same.

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