Another base rate cut on the cards? Surely not!

20th September 2016

Enough is enough. Following the most recent Monetary Policy Committee meeting last week, within the minutes the MPC have suggested that there may be another base rate cut on the cards this year, should there need to be. Although they admit that near-economic activity has been stronger than they expected, following the Brexit vote, the Bank of England may still need to use all of the tools in their armoury to stabilise the economy. Cutting rates further may be one of them.

But at what expense? Frankly savers have suffered enough. The long term effects of the serious lack of savings culture will be damaging, not least the damage it's already having on those of you that are or were relying on your savings income. There's news that even before the Bank of England made the decision to cut the base rate to the ridiculously low 0.25%, there were positive signs in consumer confidence. The cut in the base rate is supposed to put more pounds in our pockets, to encourage us to spend more and in turn help to boost the economy. Well, it seems we were already doing it. Retails sales are up, bonuses paid to staff are 4.4% higher than 2015 and unemployment is at an 11 year low according to the Office of National Statistics. All of which seems to be shrugging off the Brexit vote, according to the BBC. Consumers at least, seem to be feeling fairly positive.

We have to stop this constant hitting savers where it hurts. It may be fine for those people with a longer term approach to saving, who may be happy to look to alternative ways to earn more and are happy to take the associated risks with their money. But what about those in retirement who can't afford to. What about grandparents, mothers and fathers or those saving for a deposit on a home who can't take a risk or rely and NEED the interest from their savings.

Enough is enough. We appreciate that the Bank of England has an important job to do and the need to cut rates may be there to stabilise the economy but really, how much more can savers take? 

Monday saw the official start of the new Term Funding Scheme whereby those providers that have already applied to the Bank of England will be able to start to draw-down cheap funds to lend. At a cost of bank rate, so just 0.25%, we'll wait to see what impact this will have on savers and savings rates. Good news for borrowers at the expense of savers yet again?

If you, like many of the millions of savers, have had enough, get in touch. We are here to help you, your grandparents and your family get the best returns on your savings and, believe it or not, you can still make a real difference in interest by choosing the right home for your money.

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