Who will rescue UK savers?
Despite some savers in the UK hoping that UK base rates would have moved higher in the short to medium term this appears to be highly unlikely. Many experts believe that UK base rates will remain at or around current levels until at least the second half of 2011 and even this may well depend upon economic growth in the UK, which has recently been downgraded by the likes of the IMF. So who will rescue UK savers?
The sad truth is that savers in the UK are the innocent victims of the economic downturn and the credit crunch which have had a massive impact upon the UK economy and money markets in particular. The Bank of England was forced to reduce UK base rates to 0.5% to try and increase the level of cheap liquidity available in the marketplace, to oil the wheels of the UK economy, but this has had a massive negative effect on UK savers. Even though savings rates have increased slightly over the last few months many accounts are offering minimal interest rates which in many cases is less than the rate of inflation and therefore seeing savings reduce in power in real terms.
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