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About LinkBacksRead more.Rates at their lowest ever as the Bank of England tries to get people spending.
Read more.Rates at their lowest ever as the Bank of England tries to get people spending.
It will screw over my savings, that's what.So the question is: how much effect will this new low in the Bank of England base rate actually have?
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What are "savings"?Originally Posted by Steve
bogof
Little bits of wood
agreed, was it only like one month ago i was getting 6.55%... waste of time saving now
With stock markets bottoming out, is now the time to move those savings into equity funds or similar, for the less risk averse amongst us? Corporate bonds have had a beating too!
That's what they want you to think
My savings are floating in the aether with FSCS earning a fixed rate for now
This is what is bad about cutting interest rates. Reduced incentive to put money into savings will mean that less money is available for banks to lend.
That's up to the banks then - if they want more money to lend then they can just keep savings rates higher.
Otherwise they won't bother, and we will go out and spend the money/pay off mortages instead, which is better for the economy and could start bringing about the end of the recession.
No! You may be able to make some money, even a fortune, but you could lose it all. Nobody knows whether the markets as a whole have bottomed out or have further to fall, but in any case you don't invest in the whole market you invest in individual shares - any of which could potentially go all Woolworths on you. Only invest in equities if you can afford to lose it.
...kind of the reason I caveated it with "for the less risk averse"
Its silly, why punish those who have been careful and save for the future, and really give a lifeline to those who are careless and spend spend. How would a two tier system work out you think? One for savings and investments, the other for loans and credit?
Well the money from the loans and credit (except the interest paid back) comes from savers.
If nobody gives the bank any money, they can't lend.
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Another government financial brainwave. They want banks to recapitalise, and to be less reliant on leveraged lending. In other words, more lending based on capital than borrowing. To do that, you need people to deposit. So you cut savings rates.
They want people to save more, but they also want people to spend more.
They want banks to cut interest rates to borrowers, while saying they want to protect those with fixed incomes, like the retired living largely on investment income.
Talk about mixed messages.
Oh, and if, as Brown keeps insisting, we're in such a good position to weather what he insists is an international problem, how come they're having to cut interest rates to the lowest level the BofE has had EVER?
Perhaps the BoE just decided that the pound was such an over-strong, expensive currency that it was their duty to help collapse it in international money markets. A weak pound benefits everyone!
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