If negative interest rates are adopted some banks warn there could be charges to business accounts
A week ahead of the Bank of England’s meeting where stimulus packages and interest rate cuts will be discussed, some banks have warned customers of possible charges should rates fall below zero.
NatWest and RBS sent out a letter to some 1.3m business banking customers explaining that should the Bank of England adopt negative rates then business account holders will be charged on their deposits.
“'Global interest rates remain at very low levels and in some markets are currently negative,” the letter stated. “Dependent on future market conditions, this could result in us charging interest on credit balances.”
This announcement comes close on the heels of the Federations of Small Business’ report that confidence in small business has hit a four year low causing them to call the proposed change “deeply concerning.”
“'When the Monetary Policy Committee meets next week to decide on interest rates, we would call on them to do everything possible to consider the implications of changing interest rates for smaller firms and the self-employed looking to maintain or grow their business,” said Mike Cherry, National Chairman at the FSB. “It is now vital that all finance providers holding deposits from small businesses do everything they can to update customers concerned about any changes to their Business Current Account (BCA) during this uncertain economic period.”