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In the News

The Folly of Negative Interest Rates

Geoff Riley

13th September 2016

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John Kay's wisdom shines through in this critique of the negative yields / negative policy interest rates that have spread across many of the world's advanced economies.

About half of all Eurozone government debt, and most Japanese government debt, now carries a negative interest rate. And now some large corporations are issuing new debt with negative yields - although they are not borrowing to fund investment.

Kay's article is strong on some of the huge generational issues that ultra-low interest rates flame. "To provide 70% of gross income for 25 years of retirement when real interest rates are zero requires setting aside 45% of that gross income every year."

Why pay to lend a company money?

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Geoff Riley

Geoff Riley FRSA has been teaching Economics for nearly forty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD and Revision conferences in the UK and overseas.

@tutor2uGeoff

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