Interest rates cut to 0.25% from 0.5% discussion

gadgetmind

Living_proof wrote: »

Hear hear! And now inflation is due to take off we won't even be able to buy so much with our hard-come-by savings.

It's worse than that, On the day the results came out, sterling dropped 10%, so every pound you'd saved instantly had 90p of buying power on a global basis. It takes time for this to filter into shelf prices, but it will filter.

gadgetmind

BucksLady wrote: »

I feel sorry for elderly people who have not received the benefit of a good education

The good education was there for the taking, so they could have received it had they chosen to. You can take a horse to water, etc.

So saying, my parents both left school at age 14 as they needed to be working to support family, but it didn't hold them back. They couldn't help me with any homework after primary school, but that's the beginning and end of their limitations.

Many have not been able to save very much into pensions or cash savings. Such people are suffering so badly with the meagre rates which are on offer.

If you don't have much in savings, what do rates matter?

ManofLeisure_2

[QUOTE=gadgetmind;71097478



If you don't have much in savings, what do rates matter?[/QUOTE]


Crikey, I would have thought that was obvious lol.

masonic

gadgetmind wrote: »

Of course, when inflation starts to bite, we may still see interest rates having to rise, so never say never.

It's a possibility, but of course the Government has a deficit to deal with and some more inflation will probably do a better job of tacking that than Osborne was able to manage. In fact, this is a great opportunity to surreptitiously allow inflation to bite, while having an excuse not to try to exert some control by raising rates.

It wouldn't surprise me if, unofficially, the CPI target is somewhat higher than 2%.

masonic

kingrulzuk wrote: »

what im thinking is: now that the rate is cut will that effect my current accounts?
I don't have mortgage or any loans, but I have savings in current accounts

The best high interest current accounts were offering about 3-6% interest when the base rate was 5.75%. There are still current accounts offering about 3-5% interest after 5 years of the base rate being at 0.5%. It would be surprising to see them all disappear in response to the base rate falling another 0.25%.

Thrugelmir

buglawton wrote: »

There should have been an emergency post-Brexit stimulus budget the minute May came in. Some real cuts in VAT and Stamp Duty just for starters.

Stupidly, the chancellor decided not to bother.

Treasury still has a deficit black hole to bridge.

Mr_Costcutter

My fear is that the lower the rates fall, the more likely it will be that future generations will not acquire the 'savings habit'.

Thrugelmir

Mr_Costcutter wrote: »

My fear is that the lower the rates fall, the more likely it will be that future generations will not acquire the 'savings habit'.

Pensions auto enrollment is at the start of a long road. Of course savings will take spend out of the economy. Another blow to the services sector on which the UK economy is so dependent for growth. At least a weaker pound is a boom for tourism. .

Thrugelmir

digannio wrote: »

I'd already long given up the ridiculous chase for ever diminishing returns on cash Isas and the like. I sit back and let the likes of Artemis Monthly Distribution provide me with a monthly income and don't take too much notice of the weekly/monthly movements in the markets and the profits of doom. It might have injected more risk into the equation but overall it's been a lot less stressful than the annual scramble for next to nowt... and more profitable.

Aren't you concerned that Company profitability is falling and as a consequence dividend pay outs are under pressure. Every lever pulled impacts somewhere else.

gadgetmind

ManofLeisure wrote: »

Crikey, I would have thought that was obvious lol.

OK, help us out.

1) Postulate a level of savings that meets the "don't have much" condition.
2) Show what annual income this would have produced at 0.5% base rates.
3) Repeat exercise at 0.25%
4) Compare and contrast with said person's pension income and so show that it matters.

As it's "obvious" this should be a doddle for you. Knock us out.