The Bank of England has cut the base rate again. It is now just 1%. This is not good news. Banks are not passing on these rates cuts in full except where they are legally obliged to do so – for example if you are on a base rate tracker mortgage.
However, those kind bankers have seen fit to pass those rate cuts onto savers. Yes, those who have been prudent enough to save some money are now being penalised heavily. Pensioners who put their life savings into savings accounts in order to live off the interest are now truly struggling. Savings interest rates are falling rapidly towards zero.
Rate cuts are not the answer to our problems. I’m afraid a rather long and painful period of contraction is going to happen regardless and all we are doing now is making it worse.
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