Thursday, December 4, 2008

Finally, a voice for savers from mainstream media

Why punish savers?

As a group, small businesses actually save more than they borrow. So although most of the banks are committed to passing on the Bank Rate cut to small businesses in the form of lower rates on loans, arguably small businesses would be more out-of-pocket if the meagre amounts they earn on their deposits were to evaporate completely. In the scale of alleged bank boo-boos, what's worse? Failing to pass on all the interest rate cut to hard-pressed families, or slashing the retirement income of elderly couples who live off the interest on their bank and building-society savings?

Posted by peter_2008 @ 08:53 AM (747 views)
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5 thoughts on “Finally, a voice for savers from mainstream media

  • Interesting that its taken a commentator to say this rather than the state media (notwithstanding the fact that he’s paid a retainer by the BBC).

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  • Whilst the ever-dwindling interest rates on my savings do make me feel a little nauseous and aggrieved when I dwell on them, I think it’s worth looking on the bright side: even though my savings may soon be eroded in real terms by inflation, they are still doing better than house prices (2.6% in November if the Halifax is to be believed), and a house is what I want to buy with them…

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  • Cutting interest rates so aggressively has no effect on banks lending, since we do not have a liquidity crisis but a solvency crisis. Cutting interest rates has a big impact on the value of £, and what the government is simply doing is a massive devaluation of the £. So much for GB to come up with great ideas, there is nothing new in what he does, it has been all done before him in previous recessions. The word “devaluation” is somewhat tainted so GB calls it something else.
    There is no other course of action than letting weak business fail (and they fail anyway eg MFI,Woolies….) and asset prices drop to their fair value (which they will no matter what). The government is not doing anything substantial because they know they cannot go against market forces. They talk and spin about it but really they are not doing anything except telling us they are.

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  • Couldn’t agree more re punishing savers-how many times in the last 8 years have borrowers had cause to wheel out the champagne and toast the MPC? (Hang them I say)
    Glad I stashed my UK dosh at fixed rates around 6% before rates fell, but wonder what choices there will be when the terms expire -and also how safe it is. It’s unbelievable that the pitiful amount of interest you get is taxed, while the money is devaluing at a much higher percent (except against houses)- it amounts to a tax on inflation.

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  • Peston seems to do his own thing, but this morning the Propaganda Wing of the Government, AKA Bill Turnbull & Sian Williams, were saying how Gordon Brown has given borrowers a ‘Shot in the arm’ by reducing interest rates. This is total baloney. Ask yourself this: – Who has got the biggest debts and who stands to gain most from interest rates on the floor? Answer Gordon Brown and HMG who are doing everything to save their own skins having wrecked this Country in just about every conceiveable area and are planning and creating policy to get re-elected next time. I’m 62 and I can never recall a Government who have lied and schemed quite as comprehensively as this shower.

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