List of before/after rate cuts following BoE cut?

hoc

Is there a list somewhere (on MSE or another site) that shows the interest rates on accounts before and after the recent BoE change? Probably of interest to this community to track in addition to numerous individual threads on specific banks/accounts and good to point out the banks that have not reduced by more than the 0.25%.

pavane

Yes we need this!

The best I have found was this report http://moneyfacts.co.uk/news/savings/savings-market-left-devastated/ but it only provides a summary of the average, although mentions:

Data further shows that 53 of the cuts were larger than the base rate cut of 0.25%, with some providers decreasing their rates by as much as five times that. For example, United Bank UK cut its seven-year bond from 2.12% to 0.82%. Not only that, but in line with previous reports, 20 best buy deals (those in the top 10 of their sector) have been completely withdrawn from the market.

It doesn't name and shame individually those that drop by more than 0.25% using the BoE cut as excuse. It's not just about the Santander 123 which is what has been getting the headlines and MSE discussions.

janeskips

Virgin and Skipton reduced by 0.25%. Tesco reduced by 0.35%.

Yes, Tesco's is just an extra 0.10% and not as dramatic as Santander 123 but it is disingenuous for them to link the change to the Bank of England cut. The rate is variable, it is understood it can be cut, it will go down as well as up and so on but just be honest.

I am sure there are others.

Most annoyingly, for some reason, changes to monthly regular savers don't seem to be communicated by banks. No letter, no email unlike instant or fixed access accounts.

eskbanker

Personally I'm unconvinced that such a list would be of any meaningful value but each to their own. There's no doubt that many banks have taken advantage of the opportunity to reduce rates but equally there have been massive changes in savings rates over the period since 2009 without any base rate changes, so the apparent expectation that all recent changes should be correlated exactly to a 0.25% base rate reduction is illogical.

For those who feel this would be useful, how would you interpret the data? A bank reducing rates by exactly 0.25% (or less) could be seen as a (relatively) positive sign but conversely it could make such an institution more likely to apply other corrective changes at a later date, whereas those making larger changes in one go may be less likely to change later....

Pincher

What's the hurry? I would rather wait till the dust has settled.

Any rate you see now probably won't be there by December.

I just want to know NS&I won't change the 1% on the Income Bond.
The return on Premium Bond has been quite decent, in the last three months. I probably just jinxed it.

janeskips

eskbanker wrote: »

Personally I'm unconvinced that such a list would be of any meaningful value but each to their own. There's no doubt that many banks have taken advantage of the opportunity to reduce rates but equally there have been massive changes in savings rates over the period since 2009 without any base rate changes, so the apparent expectation that all recent changes should be correlated exactly to a 0.25% base rate reduction is illogical.

For those who feel this would be useful, how would you interpret the data? A bank reducing rates by exactly 0.25% (or less) could be seen as a (relatively) positive sign but conversely it could make such an institution more likely to apply other corrective changes at a later date, whereas those making larger changes in one go may be less likely to change later....

What you say about changes to rates and account types since 2008-9 is true but this has nothing to do with that. Banks can drop rates to what they like and scrap accounts as they see fit. The issue is slipping in a misleadingly deeper rate cut and blaming it on the BoE rate cut. This is not a fair justification.

If I compare the letter I received from Virgin and Tesco I will illustrate my problem. Virgin states the BoE reduced the rate by 0.25% and they will do the same. Tesco does not mention the BoE's rate reduction amount, only that it has been reduced, and in the same sentence mention their 0.35% change. This is not clear communication at best, to me it is intentionally disingenuous.

Banks can do what they want when they want to their rates. This list would be useful to see how honest banks are being. It is not about positive or negative signs about the market. In reality, the best would be to track how the reduction is being communicated and if the BoE's actual cut is stated and explained properly but that would be more of an Ofcom job.

fun4everyone

janeskips wrote: »

Most annoyingly, for some reason, changes to monthly regular savers don't seem to be communicated by banks. No letter, no email unlike instant or fixed access accounts.

Aren't most of these fixed rate for the year so therefore why would they send a letter when your rate isn't actually changing?

Sure new ones being opened have a new rate but you would still be on the old one?

That said I think there a couple that are variable rate and presumably if these dropped, 2 months prior notification by letter would be required.

eskbanker

I think we're at cross purposes here - OP appeared to be seeking a simple before/after rate comparison whereas other posters appear to be advocating a witch-hunt to identify banks that have been disingenuous in their communications by blaming larger reductions on the base rate change....

eskbanker

janeskips wrote: »

Tesco does not mention the BoE's rate reduction amount, only that it has been reduced, and in the same sentence mention their 0.35% change. This is not clear communication at best, to me it is intentionally disingenuous.

If the wording on your letter is the same as mine, what they actually say reinforces my earlier point with the rest of their sentence:

With savings rates in the market falling in recent years and the Bank of England having reduced the base rate, the Standard Interest Rate on your [account] will change [by 0.35%] on 8th November 2016.

or in other words they're recognising the broader picture rather than trying to claim direct correlation with the 0.25% BoE cut. Personally I don't see this as being either unclear or disingenuous, especially in the context of the massively high profile of the size of the first base rate change in over seven years....

Flobberchops

Barclays Everyday Saver; already recently hit with a flattening of all balances to a single (lowest) tier of interest, from 1st Dec it'll be reducing from 0.25% to 0.05%.

That's either an 80% decrease or a 0.2 percentage points decrease - so, either better or worse than the BoE drop, depending on how you choose to square it up.

My personal hunch is that Barclays have rounded it down to the lower bounds in the anticipation of further BoE cuts later in the year.

pavane

Flobberchops wrote: »

Barclays Everyday Saver; already recently hit with a flattening of all balances to a single (lowest) tier of interest, from 1st Dec it'll be reducing from 0.25% to 0.05%.

That's either an 80% decrease or a 0.2 percentage points decrease - so, either better or worse than the BoE drop, depending on how you choose to square it up.

My personal hunch is that Barclays have rounded it down to the lower bounds in the anticipation of further BoE cuts later in the year.

Are you being cheeky or serious?

Yes, both 80% and 20 basis points in your example are correct. The rate drop has to be discussed in absolute terms not relative. Your examples with Barclays is a red herring- it was before and is after the change below the BoE's rate and in line with others like this where applying the BoE cut would have resulted in 0 or negative rates banks have retained some nominal rate.