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David Miles, the incoming member of the MPC, has this evening suggested that the worst of the UK recession may be over and house prices may have bottomed out. While there is some scepticism with...
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Saturday 3rd January 2009
As savings rates continue to plummet in the UK while banks appear intent on maintaining relatively high mortgage rates compared to the base rate, there is a feeling that UK savers are being used to fund more expensive consumer finance. As well as borrow money from the money markets the UK banks are allowed to lend against their asset base which is in effect their savings customers and loan customers. With many savings rates falling to around 0% already it appears the banks are already making "hay while the sun shines" by using savers deposits to increase their returns from customers lending money.
This has prompted a fierce backlash from a number of consumer groups who are adamant that the government needs to step in now and protect the interests of UK savers. Less talk and more action seems to be the name of the game at the moment as the government is caught between a rock and a hard place and uncertain what to do. Tax incentives and various allowances for savers have been floated but as yet nothing has been confirmed or been put before Parliament. Surely this must just be a matter of time? |
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Comments (1)
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j prentice said,
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05th Feb 2009 @ 19:29
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Surely savers now need to press the nuclear button by getting together and threatening to withdraw their money en mass unless interest rates for savers are returned to say 5% without delay. The run on Northern Wreck certainly got the Gov't off its backside.Savers just need a bit of leadership.
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