All Big Banks Could Follow RBS and Send Rates Negative

If one big bank cuts interest rates below zero, the others might all follow

by Tim Wallace

RBS and NatWest’s decision to consider cutting interest rates below zero could prompt all of the other big banks in the UK to follow suit, analysts believe, leaving most small businesses facing the prospect of paying for the privilege of holding money with their bank.

RBS changed the terms and conditions on its business current accounts this week to let firms know that negative rates could be imposed if market conditions shift, and if the Bank of England cuts rates hard.

Market insiders believe this could trigger a wave of cash flooding out of RBS and into other banks.

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