Why are savings rates on the floor?

Glen_Clark

gadgetmind wrote: »

Yes, but surely people can see through this?

I doubt if the majority can see through it. Even on this forum, where you would expect people to be more financially savvy, we still have people who think savers earning 2% interest with 4% inflation are getting money for nothing.
We still see first time buyers who think the Government is helping them with 1.99% mortgages. Oblivious to the fact that limiting the housing supply through planning restrictions, then throwing more money at that limited supply, is what is making their dream unaffordable.
They don't have to con everyone, they don't even have to con the majority. Just enough to get re elected. Thats what politics is all about.

bigadaj

But going back to the banks lending issue then the banks are currently supporting the zombie companies, refer to file on four a couple of weeks ago. Theory is mark to Market accounting isnt being applied very diligently, and the interest of the bank is in keeping overv valued company debt rather thanahving to write off and destroy their balance sheet even further.

nilrem_2

Glen_Clark wrote: »

I doubt if the majority can see through it. Even on this forum, where you would expect people to be more financially savvy, we still have people who think savers earning 2% interest with 4% inflation are getting money for nothing.

TBH I think you are being a little unfair to people here!

Most of us are well aware of inflation we see it everyday in our energy bills and food bills, we see our interest rates dwindling to nowt and yes we are aware of the effects of inflation on our savings but we have no control over inflation and have little choice but to accept the situation.

Of course some will say that there are more adventurous ways of investing to get a little more but most ordinary people are dubious of risking their savings after recent events.

I think most people who partake in this forum are 'savvy' as you call it but they feel helpless and sort of forgotten compared to some people who seem to be doing very well thank you with their 6 figure incomes.

Glen_Clark

nilrem wrote: »

TBH I think you are being a little unfair to people here!

really?
Please look at comment 35 on this thread.

nilrem_2

Glen_Clark wrote: »

really?
Please look at comment 35 on this thread.

I stand by my comment that you are unfairly branding people here as not being savvy of financial issues. One post is not the majority.

IMHO the majority of people who take the time and trouble to post here are more than likely to possess a sound knowledge of financial matters.

But many of us despair at the actions of the big banks and even the BOE, in fact considering the mess up some of the banks have made I reckon that some of the experts that post here could do a better job!:T

Glen_Clark

British banks drew down £4.36bn from the Bank of England's Funding for Lending Scheme in its first two months and increased net lending by £496m, helping mostly those wanting mortgages.



- link: http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9718381/Banks-take-4.4bn-from-BoE-under-Funding-for-Lending.html

Glen_Clark

nilrem wrote: »

I reckon that some of the experts that post here could do a better job!:T

I am sure they could. But it would involve short term pain for long term gain - no good to politicians who are only interested in looking after their own interests and staving off the worst of the crisis until after the next election.

grey_gym_sock

i don't think the main issue is politicians being scared of the electorate, though that's a popular view. why are they putting money into "funding for lending", where very little of it is lent out, instead of by-passing the banks and investing in infrastructure via a new national investment bank? not because of what the electorate wants.

so far as interest rates go, very sharp increases might be unpopular, but modest increases would be perfectly palatable.

Glen_Clark

grey_gym_sock wrote: »

why are they putting money into "funding for lending", where very little of it is lent out, instead of by-passing the banks and investing in infrastructure via a new national investment bank? not because of what the electorate wants.

Cameron may be looking forward to a highly lucrative part time job at a Bank - like Blair

morrisoscar

Glen_Clark wrote: »

British banks drew down £4.36bn from the Bank of England's Funding for Lending Scheme in its first two months and increased net lending by £496m, helping mostly those wanting mortgages.

So the answer to my question is the government have given cheap money to the banks and building societies, they then use this to screw people who have some savings.:T