⁍ Interest rates in the United States, Britain, Norway, Australia, New Zealand, Israel and Canada are at or below 0.25%.

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⁍ Money markets are pricing in the Bank of England making the move in 2021.

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⁍ New studies however seem to reinforce what some policymakers have long feared — negative rates are ineffectual and perhaps even counterproductive.

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– Central banks around the world have cut interest rates to record lows in an attempt to jump-start economic growth, but new research suggests negative rates aren’t such a great idea. In a study published last month in the Journal of Behavioral and Experimental Economics, Lior David-Pur of Israel’s state debt management unit says that when interest rates are negative, people are more likely to take on debt and invest in risky assets. “If your goal is to motivate people to take on more leverage (debt) and to increase investments in risky assets, then zero interest rates are actually more efficient than negative rates,” David-Pur tells Reuters. In the study, 205 university students were divided into four groups, each with about $2,600 to invest. Interest rates ranged from 2% to minus 1% but were then cut by 1 percentage point. Participants were then asked how much more money, if any, they wanted to borrow to invest. David-Pur says the group for which rates fell to minus 1% actually cut leverage by 1.75%. But willingness to borrow rose by 20% in the group that saw rates fall to 0%. “The number 0% itself had special meaning for people,” says David-Pur, noting that once rates go negative, leverage— borrowing to invest—falls. That’s because negative rates can suggest “some kind of emergency situation,” says a former ECB economist. “That per se suggests that you won’t get the impact you want because people might just save more money instead of spending.” Indeed, savings rates across the euro zone dipped briefly after 2014.