Qualified advisers answering your
Financial Questions
call 0800 092 1245

Do 0% interest rates actually work?

As the US stock market responded positively to the reduction of US interest rates many are now looking around the world to see if historic instances of 0% interest rates have actually worked. The only real similar situation was that in Japan in the 1980s were rates were slashed to 0% as the economy collapsed and the property market was brought to the ground. So did 0% interest rates work in Japan?

Unfortunately the signs are not good as the Japanese economy took literally a decade to recover and even today the Japanese stock market has never reached the highs of the boom time. Interestingly the Japanese economy is also struggling in a similar vein to the US economy and interest rates in Japan are similar to those in the US. Whether a concerted effort by worldwide governments is enough to head off a potential worldwide depression remains to be seen but this situation is currently the most challenging of the modern era.

One of the problems which the Japanese and US governments need to consider is the fact that 0% interest rates have the potential to massively increase the debt of the country which could take decades to pay back. Whether this is enough to stimulate some kind of recovery remains to be seen but many believe this is literally the last throw of the dice.

Share this..

Related stories

Financial Guides

Financial Calculators

Our useful calculators can help you get your finances in order:

Latest News


Helpful new tax year facts that could affect you and your money

Blog | Seven helpful new 2016/2017 tax year facts that could affect you and your money. Our recent online blog shares a brief outline on how to stay up to date.

Read more

Useful Links

Popular Searches

Please Enter More Details

Enter More Details