Bank of England - Rates down to 3%

ScarletBea

evenasus wrote: »

It will certainly not make me spend.

It may encourage the people who spent money they didn't have (who contributed greatly to the current situation) to spend even more.

I agree, and it's logical: if I have less money, I will spend less.

Lokolo

pawpurrs wrote: »

Would like to know the best advice for this too. Anyone?

http://www.moneysupermarket.com/savings/

Select term accounts less than 1 year. Then read the facts.

Usually Haliax is good but not sure about their rates; 3 months, 6 months etc....

Fella

Lokolo wrote: »

You say that but the cut will mean people will ease up and hopefully start borrowing and get money moving around again.

The worst possible outcome.

What we need is for people to start paying money back.

Anything else merely delays the inevitiable & makes it much worse.

pawpurrs

So You want to go for one with yearly rarther than monthly changes to stop the rates going down, would it be April that it would go down?

Liloly

ECB rate now 3.25%.
For this first time ever, the BOE rate is less than ECB.

I dont believe that our BOE panel made that decision without political interference from Gordon and Darling.

What irritated me about the emergency cut last month was how Gordon announced it himself in parliament taking all the kudos for it.

What will happen to savings rates? Well some cant be cut by 1.5% as they are less than than now, so they will go down to 0.1 or 0.05%.

Then when eventually rates go up again, new accounts will be offered and the rates on the old accounts will never rise.

I used to get 3% in Barclays current years ago, then it dropped to 0.01% for years, now its been abolished. Very quietly, I just noticed I was getting no interest any more.

The usual suspects will never stop calling for cuts til the base rate is 0%.
There is somethiing called the liquidity trap where if you cut rates below a certain level which I would say is 4% in the UK then it has no positive effect at all. This is what happened in Japan.

[Deleted User]

A lot of people will have been frightened to death re their debts, jobs etc. They will not start spending. I have no debts and i will not be spending. The massive rate cut shows what a mess we are in and there is not much else we can do in the uk

The only people who might now get buying are the house sellers with a lot of money in the bank. They might start to buy houses again

GeorgeHowell

Brown's call for mortgage rates to come down to match the drop in bank rate displays once again his basic ignorance of the realities of financial markets. Building societies and banks are locked into paying a lot of fixed rate interest to savers, over periods of a year or more. This has to be funded at least in part by interest earned on mortgages and other consumer loans. It will take a considerable period for bank rates drops to filter through the system.

Overall though those dependent on pensions and/or interest from savings for the bulk, or all, of their income are better off with low inflation and low interest rates, then the the opposite -- if that is what we actually get.

Labour governments always try to spend their way out of trouble and eventually run out of money -- it's in their DNA.

sm9ai

Why will lower rates help.

For banks it is all risk vs reward. If a bank lends at 3%, it is a huge risk(in the current climate), and very little reward. At the moment the banks control the interest rates, not the government. IMO it is going to make very little difference. Except ruin the currency.

Lokolo wrote: »

You say that but the cut will mean people will ease up and hopefully start borrowing and get money moving around again. If theres more money moving around then business's will start to improve. But obviously this is based on a lot of hopefullys!

Lokolo

sm9ai wrote: »

Why will lower rates help.

For banks it is all risk vs reward. If a bank lends at 3%, it is a huge risk(in the current climate), and very little reward. At the moment the banks control the interest rates, not the government. IMO it is going to make very little difference. Except ruin the currency.

Because people will be able to pay it back.... Its more of a risk when IRs are high because as soon as banks put up rates really high and people can't pay it back....

But I imagine a lot of banks won't be lending money out easily.

pawpurrs

Sorry I am still confused, is there such a thing as a fixed rate savings account with instant acccess or access within a month that I can fix in to today to get a good rate?