Interest Rates

aardvaak

So have you NEVER been in a position where you NEEDED to lend money?

Yes lots of times and very often paid dearly

nilrem_2

Aegis wrote: »

Personally I'd be less than happy living off just savings because inflation erodes away at the capital in the long run.

I agree, but there are some people (myself included) who due to circumstances have no choice other to live off savings interest, it's ok if one has large savings generating lot's of interest but when one is on the border line it can be worrying when rates start to plummet.

(FWIW I didn't call anyone plonkers, in case any one gets the wrong impression:eek:)

Jonbvn

The BoE rate decision today will have little regard for savers or mortgagees. What will decide is this little issue of a credit crunch. You may have noticed a few cuts across the other side of the pond recently.

Finally a word for the OP. If it wasn't for the people borrowing money, who exactly do you think would be paying interest on your savings? I would suggest you consider some options where the BoE rate will have a minimal (or even +ve) impact on the return on your savings - there are several.

tradetime

It might also be worth considering that in this country the role of the central bank is the control of inflation, I have not looked at RPI during the high interest rate periods, but I suspect it was likely to be running pretty high, something that would need to factored in to return on savings to see whether the real inflation adjusted return was all that much better.

Secondly we are in the midst of a credit crisis at the moment, whilst lowering of interest rates alone will not fix this, it is one tool in the BOE's box. If it is not fixed we are likely to see more banks collapse and you will find very little return on your savings whilst queuing to claim it back from the FSCS. I would be far more worried about that, than a few basis points on the interest rate.

free4440273

aardvaak wrote: »

It makes me sick that we have come round to the time of the month that the news presenters think it's clever to try and convince the BOE to reduce interest rates.

They seem to want to pander to the plonker mortgage payers that have themselves to blame by over extending themselves.

Just as our rates are showing signs of giving us a reasonable return some people are trying to kick us in the teeth.

Interest is my only form of income and the action of these people causes me real hardship.

There are more savers than borrowers when are they going to understand this?

Absolutely agree. And as i've said before here, despite the protestations, savers have only seen rate increases due indeed to the severity of the credit crunch: specifically, lenders needing to shore up their balance sheets by enticing savers with 'exceptional' rates. Were it not for the credit crunch, were we living through a financial 'norm', those savings rates would be absolutely negligible compared to, say, 2004. Anyhow, that's the way it is: I expect a .50 cut from the BratsOfEngland today:mad:

tradetime

I expect a .50 cut from the BratsOfEngland today

I'd be very surprised if that were the case, inflation still remains stubborn, the BOE does not have the FED's mandate. Blancflower will almost certainly look for .50, but I expect a steady as she goes .25.

free4440273

^Possibly: I've hedged my bets in the poll: .50 (possibly .25

(and I don't think they give a toss about inflation: they have bigger problems...IMO

free4440273

.25 cut announced.

martinman3

It saddens me to read posts from borrowers complaining about savers while the savers are being cheated as the BOE cuts are being used to increase margins for the lenders.
Many of those savers are now probably considering withdrawing their money from UK organisations and transferring it to Icelandic bank accounts where the rates are better. This will make the situation even worse for borrowers, they should remember that.

p.s. If you read the posts from the start it is interesting how a certain group gradually rewrite the original post until it is somehow being offensive to all borrowers. If they bothered to look properly the OP said that borrowers who have over-extended themselves are plonkers, which they are since they gambled on interest rates falling even lower than the introductory rate on their mortgages. Now that the introductory rate has ended they are going onto SVR and can't re-mortgage.

Lokolo

martinman3 wrote: »

It saddens me to read posts from borrowers complaining about savers who are being cheated as the BOE cuts are being used to increase margins for the lenders.
Many of those savers are now probably considering withdrawing their money from UK organisations and transferring it to Icelandic bank accounts where the rates are better. This will make the situation even worse for borrowers, they should remember that.

I don't think you quite get it, the OP is complaining that IRs are being cut as he is a saver, there are 2 sides to it, borrowers and savers. No-one should say they are being worse off because of rate cuts because when its the other way round they are benfitting whilst borrowers are losing out.

And to be fair, the OP said about the 'plonkers', when there was no mention of this before, as Aegis, is a borrower never stating that he 'over did it'.

If the OP wants to complain about IR falling and him losing out then he must shut up when it comes to IRs rates falling and borrowers moan, would you agree?