Bank of England - Rates down to 3%

Lynt_3

Presumably rates will go up again on day???

What a flippin' nightmare

Lokolo

aardvaak wrote: »

But where would the "new" money be coming from - not savings rates?

Thats when banks also start borrowing from each other.

Thus getting the whole system back up and running.

(some banks obviously have more money than others, HSBC has loads, Halifax has f all, so Halifax borrow some from HSBC at 2% or whatever)

btw - this is what I think happens. I am not expert! But I am sure someone will come along and say otherwise if they know I am wrong lol

alchemistkevin

nilrem wrote: »

Are you sure you are in the right Part of the forum? This is Savings and investments! Many people here depend on what interest they receive to live on.
They always seem to pander people with debt and do nowt to encourage people who are prudent and save, without savers where will they get the cash to loan to people? :eek:

A lot of people who depend on savings interest are retired or disabled and have no other means other than perhaps a state pension.

I am Thanks for asking.

I am a very very very prudent money-user and live well (very well) within my means and can be regarded as well and truly traditional in terms of savings, spending, debts, etc...

No one who is 'dependent' on their savings for their savings to survive have their savings in current/regular savings accounts. It's usually fixed with fixed returns.

I get your point but I guess you're getting very dramatic in portraying what you want to say.

Most of money out of my mortgage over payments is in savings and it will be hit but I'm happy to take the hit if it means people don't have to loose homes and jobs.

Our economy is in dire straits, we are in a much bigger problem than we think we are in and unless something urgently is done to resolve it we will see a lot of people getting on benefits and it's easy to do so, as another poster mentioned, it's the prudent ones that are harmed and I agree but at this time the priority is to support the economy and not to look at how much interest I'll be losing on my savings (or you on yours)

alchemistkevin

aardvaak wrote: »

How on earth can we spend more on goods if we are to get much,much less for our saving/investments

and that's why you spend and get the credit ball rolling again.

I will go out and buy a new car yay and make some over payments into my mortgage account and once the wheels start turning again we can worry about saving

The other option is: the rates are kept high, which will mean the LIBOR stays high, which means the companies will look at trimming their costs, laying people off, starting turning off the bulbs and there's really no benefit from there on, to anyone.

Give me an opposite scenario please.

I know people don't agree with my views but give me an opposite scenario where the rates are, say 6%, and the savers are getting, 7-8% and the mortgage/loan rates are 10-14% (if not already so).

You as a saver will get 7-8% but show me how the economy will benefit and we will be able to keep our jobs and it will be bright again. Give me an example and if I think it's a good idea, I will write to the local MP and the papers and see if the policy makers listen.

sm9ai

whats going to be interesting is come April inflation could be higher and interest rates lower.

So we might have student loan interest charged at 7/8% whilst interest rates are down to 2/3%. And that would really suck :mad:

alchemistkevin

Oblivion wrote: »

I have come across situations like this all too frequently during my working life in local government. It's all very well for the government to keep banging on about a fairer Britain, but a fairer Britain will only come about when those who have acted responsibly are actually rewarded for their sensible actions.

Dave.

I agree

Sadly my tax money is not going into building schools and roads but saving the bankers and paying people on benefits.

evenasus

nilrem wrote: »

I am getting to think that savers would be more respected if we just lived beyond our means and borrowed more than we could ever afford or depended on the state for handouts!:mad:

And then declared ourselves bankrupt to get out of paying back.:mad:

alchemistkevin

Quentin wrote: »

Don't count your chickens just yet!

FTSE now down 140 on the day

oops! .

angioma

I too share much of the anxiety and frustration shown by many in this thread, particularly Agent_C, Nilrem & Oblivion.

I owe nothing, other than my monthly credit card bill which is always paid in full. Although I have a fair few years until state pension kicks in, I am on a pension from my last employer when I was made redundant aged over 50. Another pension plan, a section 32 buyout from much earlier employment, was supposed to start fairly soon, but it's value has dropped alarmingly in the past few months and it now won't meet it's minimum pension for some years.

I currently run my own small web-based business with my wife, and income from sales has dropped by about 50% in the past 6 weeks or so. If it continues this way, we will not be making any profit for what has been a very modest income at best of times.

The last remaining means of income is from interest gained from term savings with the likes of Saga, B&B and Icesave:eek: which provides a significant proportion of income.

I don't want to come over as Mr Doom & Gloom, because I'm fully aware that there are a multitude of people in much, much worse positions than me. All I am saying is that pension is now the only stable & reliable income. Business income has dropped alarmingly as people are cutting back on their expenditure, and now income from savings is going to fall dramatically. As recently as 6 months ago I thought I had planned my future reasonably well, but it now seems that it is time for a re-think. Being a prudent person now seems to be backfiring!!

If a big drop in interest rates keeps up employment - I might just be looking for a part-time job myself.

Mithos

aardvaak wrote: »

But where would the "new" money be coming from - not savings rates?

When rates are high people have a tendency to horde money rather than spend. Surely in a capitalist society the idea is that people spend their savings now the rates are so low, which in effect becomes the "new" money to push banks/BS and other types of businesses up again?

Soon house prices will start to look like bargains and past savers will start to buy up property, either directly or through investment accounts.

What we had before was simply not sustainable over the long term, first time buyers were forced off the chain and here we are.