Call for interest rates to stay the same
February 3, 2009 by Brendan O'Neill
News
As discussed in recent articles, this week the Bank of England’s Monetary Policy Committee is expected to make its fifth consecutive interest rate cut in as many months, reducing the interest rate from its current 1.5 per cent to just 1 per cent or possibly even lower.
The Building Society Association (BSA) has this week released a statement requesting that the Bank of England does not make any further rate cuts as the cuts are harming savers, in particular it is harming pensioners who depend upon the interest from their savings to subsidise their income.
Adrian Coles, director general of the BSA, said the cuts in interest rates had had a severe impact on savers. He said: “The reductions, from 5.75pc prior to the run on Northern Rock in 2007 to 1.5pc, have seen incomes from savings drop by almost 75pc, although the full impact of the base rate cuts has not actually been passed on to many savers.”
The BSA covers around one fifth of all mortgages lent out and one fifth of all savers accounts.
The BSA backs up its claims that an interest rate cut will do more harm than good by stating that although interest rate cuts have assisted those on variable rate mortgages, those who are still looking for a mortgage are more interested in the number of available mortgages and their range as opposed to the cost of the mortgage and it is savers that supply the funds to make mortgages available so it is important to ensure that those with the capacity to save at all should be encouraged to do so.
Written by
Brendan O'Neill
You may also interested in:
New recruits announced by April Mortgages
April Mortgages has begun the new year by announcing three new appointments, as it prepares for what it expects to be 12 months of significant growth.
Atom Bank planning expansion following relocation
Atom Bank has announced that it is planning to add to its mortgage teams, in the wake of
