Base rates down 0.25% to 5.5%

chesky369

Well, let's not be too grouchy - we've had pretty good rate rises for the past 18 months or so. Look at it this way - it's going to get more 'interesting' now, seeing who brings their rates down and by how much - our savings will be whizzing around from account to account, chasing the goodies.

whowants2brich

I think it grossly unfair and potentially against the OFT's rules of unfair contracts etc etc...:

When the base rate rises, the banks take almost a month before savers see any benefit from the rise - and even then it's not guaranteed that the savings rates will rise. However, mortgage rates rise as soon as the announcment is made.

when the base rate falls, the banks BACKDATE the interest rate fall (Lloyds emailed me too :mad:). Of course, mortgage rates won't fall, much, if at all.

If inflation is rising, then cutting rates and removing an incentive to spend, without reducing the cost of mortgages - how will that help the current situation...???

I think that Martin should get involved here and try to stop banks from taking the consumers for a ride on yet another way for them to make money out of the general public. It's a stealthy way of tricking people, and why - because nobody says anything to the banks...

GRRRRRRR... I'm just waiting for the letter from the BoE to the government to explain why inflation hits 3%+, unless they change the goods so as to keep inflation and the RPI at artificially low and unrealistic levels...

Richard

baby_boomer

whowants2brich wrote: »

I think that Martin should get involved here and try to stop banks from taking the consumers for a ride on yet another way for them to make money out of the general public.

You are asking too much of Martin. He has plenty of borrowers on his site and it's not his job to advise the BoE committee not to cut interest rates.

No doubt Martin will, in due course, criticise banks for "making money" out of interest rate changes - even though they have to take on board their increased borrowing costs which have nothing to do with interest rate changes :rotfl:

How many private sector workers are also dependent on bank profits for their pensions? They'll suffer if Martin holes the banks below the waterline.

whowants2brich

My issue isn't with the BoE decision (I think we all know what might now happen and that's a totally separate issue) - the issue here is the way that banks use scenarios for their own benefit to get as much out of their customers as possible.

I for one will be very tempted to move my money out of any bank that backdates an interest rate reduction as a result of a BoE base rate change - they think that they can get all they can from savers AND borrowers... What a lovely country we live in...

baby_boomer

whowants2brich wrote: »

I for one will be very tempted to move my money out of any bank that backdates an interest rate reduction

Are you going to keep your money under the mattress

whowants2brich

baby_boomer wrote: »

Are you going to keep your money under the mattress

Yes, but only when I've exchanged it into a few other currencies, so that when Sterling and "The Dollar" fall, I'll convert them back to Sterling and probably make much more than I would in a UK bank! :rolleyes:

baby_boomer

It was interesting that Martin didn't advocate increased mortgage rates when the banks increased savings interest rates recently, independently of the bank interest rate.

Does he believe in creating a permanent link between mortgage & savings rates or not?

exel1966

Phew !!!! I envisaged this drop so transferred a large percentage of my ICICI Hi-save balance into an ICICI bond (6.85%) on Tuesday

whowants2brich

baby_boomer wrote: »

It was interesting that Martin didn't advocate increased mortgage rates when the banks increased savings interest rates recently, independently of the bank interest rate.

If I remember correctly, the banks wouldn't lend to eachother, so borrowing/lending costs rose (significantly) - as a result, banks passed on this higher cost by increasing mortgage and loan rates.

As they couldn't borrow cheaply from any other bank, they encouraged us to deposit more money into our savings accounts, by increasing rates there.

Working on this logic, I can understand why it's fair in both situations, for the bank to vary things.

But on the flip side, I believe that an official situation which will affect everyone, the change should be made by each bank at a set time - to affect everyone. If a bank increases or decreases its SVR, then the savings rates should all be amended at the same time. This would then give banks the option of varying the rates as per the BoE but also being flexible in times when they have to cope with extreme scenarios such as the credit crunch...

Banks have become too predictable and get all they can, and the consumers pay because all banks do a similar thing (possibly an anti-competition agreement that most or all banks will drop savings rates immediately when rates go down, and delay savings rate rises for as long as possible when rates to up.)

I won't moan too much if mortgage rates fall pretty soon, but I think that it won't happen. It's the same for them, but in reverse. And an efficient way for banks to make a profit - I wonder if it's why the BoE frequently changes rates - the more they change things, the more the banks can delay the rate changes, and so the more profit they can make by delaying changes...

I just wish that the BoE was truly independent and that they stuck to the one goal they have - inflation. Not thinking they can fix the world with the one weapon that they have...

Rant over. For now

superstar_2

Halifax hasn't cut down the rates yet, so i am going to jump onto the boat now ...