Interesting Times

[Paul Kennedy]

Is it right that imprudent borrowers should be rewarding with dramatic reductions in interests rates and therefore their monthly payments, whilst prudent savers are punished by having their interest based incomes greatly reduced.

 

The winners will of course be banks who will use falling interest rates to improve their profit margins and in so doing build up the strength of the balance sheets.

 

Interesting to note credit card interest rates are around the 12% mark.

[wolfie]

To build up the strength of the balance sheets they will need to borrow less but also for savers to save more which is unlikely to happen with the present returns on savings accounts.

[Dizzy]

You beat me to the very same question Paul

 

In answer... NO IT'S NOT RIGHT !!

 

It's nothing more than an insult and a kick in the teeth to anyone who has managed to live within their means, who has not bought a house way beyond their affordable income margin, who has gone without things that they didn't really need or maybe couldn't actually afford and who has saved money for their families future years that they could simply have squandered

 

Can I start my working life again please as I'd like to go shopping with my credit cards as well as buying a 4 bedroom detached house with a huge garden and a garage and drive big enough for my Range Rover and convertable sporty car

[observer]

Perhaps the Government have miscalculated on this matter, as I understand it, borrowers a greatly outnumbered by savers = votes!

[byrdy]

The more savvy savers have locked their money in to high rates long ago.

[safeway56]

Do you mean the savvy savers who locked their cash into high interest rates with Icelandic banks ? Oh dear.

[observer]

Frozen Assets?!

[Bazj]

Do you mean the savvy savers who locked their cash into high interest rates with Icelandic banks ? Oh dear.

 

Nope..... not everyone was as stupid as the government bodies

 

And who is Brian Bevan?

[observer]

Suppose it's what's known as a (polar) bear market?!

[byrdy]

Do you mean the savvy savers who locked their cash into high interest rates with Icelandic banks ? Oh dear.

They've all got their money back!But no,there are plenty of UK banks/Building societies who offered high interest rates guaranteed for 6/12 months just a few weeks ago.

[Paul Kennedy]

Indeed they did. Not sure locking away money for longer periods of time is always the best strategy when, during these economic times, other and potentially better investment opportunties will come along that offer better than a 2% to 3% return.

 

I note that whilst Government is insisting that banks pass on lower interest rates to borrowers, the Government as a lender to banks is charging them 12% on the ?37 billion it has lent them.

 

With the base rate at 2%, the inter bank lending rate (LIBOR) is about 3.5%

 

Banks if you think about it are permanently insolvent, they borrow short and lend long, they therefore rely on depositors keeping faith with them, if banks don't realise (as indeed they didn't) that their primary responsibility should be towards savers, then maybe they should describe themselves as something other than a bank.

[byrdy]

Not sure locking away money for longer periods of time is always the best strategy when, during these economic times, other and potentially better investment opportunties will come along that offer better than a 2% to 3% return

But 5% to 6% was easily obtainable just this last week.All UK firms.

[observer]

Wasn't the problem caused by the banks seeking new (and more risky) sources of investment, rather than just relying on traditional investment by savers; which they then passed on in easy credit to borrowers?