Another Blow To Savers On The Way

Mikeyorks

bristolleedsfan wrote: »

I read today that the 3 month inter banking lending rate went up to 6% yesterday.

...........you're exaggerating. It's risen to 5.99%:p

macgyver

..............wasn't is 5.999%

Meltdown_2

Paul_Herring wrote: »

They stated no such thing.

If you saw Mervyn's face as he answered the MPs' questions ( I saw a clip on some TV News), there seems little doubt as to what he wants to do in April. Whether others will agree with him, who knows?

bristolleedsfan

Mikeyorks wrote: »

...........you're exaggerating. It's risen to 5.99%:p

Up to 6.003 % yesterday i read, and up again today in the words of sky news " to well above 6% now". :eek:

Primrose

Have read that there's speculation that interest rates could drop to 4% by next year so if you don't need access to the money I'd be tempted to go for the longest fix you can.

thor

ianmr65 wrote: »

Also the banks that are offering the best rates to savers

The Britannia aren't but they can do this precisely because they are a mutual society owned by and run for the benefit of their members:rolleyes:

alared

BoE meet on the 9/10th April.

There only remit is to control inflation and to try to keep it at 2%.
If they can`t see the rate falling

---

they won`t cut and visa versa

nicko33

alared wrote: »

There only remit is to control inflation and to try to keep it at 2%.

not always...

http://www.hm-treasury.gov.uk/media/3/0/remit_letter_2008.pdf

"The framework is based on the recognition that the actual inflation rate will on occasions depart from its target as a result of shocks and disturbances.
Attempts to keep inflation at the inflation target in these circumstances may cause undesirable volatility in output."

ianmr65

Primrose wrote: »

Have read that there's speculation that interest rates could drop to 4% by next year so if you don't need access to the money I'd be tempted to go for the longest fix you can.

I think that following the fed the BoE and eventually the ECB will throw inflation to the dogs, print loads of cash, and slash instrest rates in a last ditch attempt to hold off a postentially masssive slump. Caused by the property, credit, and banking crisises.

The fact that the ECB is more reluctant, is more to do with the spanish and irish being the worst effected at the moment, than anything else. This will change i feel.

The problem for banks across the board is that even if intrest rates are at 4, 3 or 2% the only people who will lend at that rate are goverments who are busy printing money, pushing up inflation and devaluing there curriencies, to fund the loans. Savers wont, the credit markets certainly wont, soverign funds wont and private investors wont.

So we get to the intresting situation that banks have to borrow at 6 percent minimum, and possibly a lot more, and presumably lend at higher rates.

This could well mean that rates to savers actually go up despite the cut in intrest rates, and even more imporatntly for the economy rates to borrowers go up even higher.

Pushing up inflation, depressing the housing markets even further, causing banks to become even less profitable and secure ect ect. Demand plummets, unemployement starts to rise...

Meanwhile the eastern ecomomies are booming, so all the wealth starts flowing to them, as they are the only ones with stable curriencies.

No wonder Merv, Ben and the gang are all looking so worried.