On the face of it, yesterdays decision by the Bank of England to keep base rates at 0.5% for the eighteenth month in a row, sounds like excellent news for consumers.
Those with mortgages can breathe a sigh of relief as their repayments will remain low for yet another month – though lenders are making large margins at the moment by not lowering their mortgage rates as much as they could.
Apparently there are 52% of us who are not so happy about interest rates being so low. A recent moneysupermarket.com poll found that just over half of respondents actually want the base rate to start rising as they want higher returns on their savings.
As usual, it appears that the problem is made worse by the Banks.
Whilst the base rate has remained at 0.5% for the last year and a half, the average interest rates across the leading easy access accounts has actually fallen over the last 18 months from 2.98 per cent to 2.72 per cent. A 0.26 percent decrease.
So not only are banks using the low base rates as an opportunity to increase margins from mortgages, they are also increasing their margins with savings accounts too!
No wonder savers are not too happy at the moment.
I have an old friend who was a banker.
He’s wonders why people, and more worryingly – politicians, are surprised that bankers are greedy: ‘Why do they think we became bankers?
Why do they think bankers get promoted?
Why do some people not survive long in banking?’
Answers – ‘Greed; greed and not being greedy enough!’
The only solution – try to avoid banks and deal with people; that used to be impossible but now with websites like Zopa you can…