Now Yorkshire BS e-saver rate cut

deemy2004

How can they be screwing us royally... when they are paying above inflation.... hence we are getting a good real return without risk, approaching, and in some cases exceeding twice the rate of inflation (RPI) !

Real GDP growth is around 2.4%, add in inflation of around 2.9% - which suggests a ceiling rate for interest of around 5.3% ! If your gettign above 5.3%. Then you were probably very fortunate to lock in the high rates available from Aug to Dec 04

Everything suggests that we are getting fair interest for our money with many accounts paying over 5%. Especially as the economy is slowing, thus slower GDP growth and inflation is in a downtrend both suggest a target of GDP around 1.8% and inflation of about 2.3% which gives an interest ceiling of around 4.1% ! So it would be wise to lock in he rates sooner rather than later !

Savers have had a very fortunate 12 months ! Where real returns have been VERY high and remain so in a climate of falling inflation and growth ! Nothing to complain about !

Over a year ago when inflation was 3% and growth was around 3.2% thus suggesting a ceiling of 6.2%.. Just before the rates took off, we were getting a relatively poorer rate of return with many accounts at below 5% ! That situation is not so since about Aug 04.

There are still fixed rate bonds paying 5.2% - So be quick .... lock and load the rates !

alared

Of course savers are being screwed no matter what inflation is running at.
Have a look at the loan rates compared to saving rates.
What effectively is happening is a saver with £5k is "lending" this to the bank for around 5% the bank is then screwing the borrower for double.
The banks are not screwing us

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get real.
You only have to look at their excessive greedy profits.

deemy2004

Yeh I agree the borrowers are being screwed especially by the credit card companies. BUT at this point in time savers are getting a fair deal !

Remember when the savings rates were 3.75% with inflation at 3% ... Only about 18 months ago !!

alared

I remember when savings rates were 10% and the mortgage companies were ripping everyone off for 15%.
The sooner we get back to that and chop these silly house prices by 50% the better.
Borrowing is too cheap hence the high property prices.

thor

Ok Deemy you obviously think that savers are having a good time and they are compared to 18 months ago but how much had the boe rate gone up over that period? I reckon there few account that have matched the boe rate rises in this period and that was coming off crappy saving rates as you rightly pointed out.
I also seem to remember that for the majority of the 80s and 90s the differential between inflation and saving rates was much larger than it is now although this is only off the top of my head and would be interested if someone could find a link to a chart displaying saving rates against time.