Some economists are suggesting that we may be moving to deflationary times and that Bank of England interest rates are heading towards zero. This suggests a couple of odd possibilities.
First, apparently, there are some tracker mortgages that are not only guaranteed to track BoE (a lot have small print get-out clauses) but also track below base rate. So if BoE gets to zero will the bank have to pay you each month to live in your own house?
The second one is more alarming. Quite a lot of people have inflation-proof pensions that are pegged to RPI. If this measure goes negative - it is already down to 0.9% - does this mean an annual decrease in pension?
Stoop may know the answers here.
