Should the Government encourage lower Interest Rates???

Cashpig74

magicnumbers wrote: »

I am I the only one that think the Government might have got it wrong in encouraging lower interest rates to boost the housing economy?

I as a saver technically lend my money to the Building Society and expect a return on my investment. If the return (Interest Rate) is low there is no incentive for me to lend my money to them, especially if there is a risk of the Company going bust.

Now turn the tables, the Building Societies have no incentive to lend to borrowers if they do not get an adequate return on their investment. The Government encouraged the Bank Of England to reduce rates and the Building Societies are advised to pass this on.

Would you really lend money to anybody when there is a risk that you might not get it back for a mere 2 % or similar?
Surely if the interest rates were higher at the Building Societies it would encourage them to lend more and savers to invest?

Everything the Government have tried so far has had no effect, it just seems to be drawing the process out.

Yes I know that houses might be repossessed because people have borrowed more than they can afford to repay, but houses are being repossessed now anyway!

I would welcome anybody's opinion

Hi, interesting read.

I'd like to know more about the reasons you save money and your interest in "interest rates".. Is it to make money on savings - or are your savings simply a way of storing money?

If you are looking for somekind of investment, then the bank is the last place to go. Personlly, I would suggest somekind of business idea in order to grow and create assets - it would depend on you aspirations.

Lots of ppl would call me fool for suggesting such a thing - however I do believe that making money only comes from 2 areas:

"In the know" or "inner circle" investment cliques that are not open to joe public. OR

business creation.

You will NEVER get rich by putting money in an ISA or account or anything similar EVER. You'll get the return that is advertised, but it is a waste of time.

oh option 3, lotto - but thats not business!!

Good luck tho.