Savers angry about another rate cut as returns dwindle

16 January 2009 / by Rachael Stiles
Savers have reacted with anger to the Bank of England's decision to cut interest rates for a fourth consecutive month, bringing them down from five per cent in September to just 1.5 per cent this month.

According to research from, more than two thirds of consumers were angered by the announcement that the Monetary Policy Committee made a further reduction for January, and think that the bank of England has gone too far this time, favouring mortgage borrowers but neglecting the plight of savers.

"This could well be the time for the rate cuts to end." said Louise Cuming, head of mortgages at, who believes that "if lenders show they aren't going to drop rates any further then it is pointless the Bank of England deciding on any further cuts.

We need the financial stability that comes from a solid banking sector, but banks are being urged to offer high rates to savers and lower rates for borrowers - the sums just don't add up."

Ms Cuming explained that it is the banks' lack of willingness to lend that is holding the housing market back and that the MPC's changes to the base rate will not affect this, so the Government needs to move its focus onto easing the flow of credit.

More attention needs to be paid to savings accounts, she continued, as deposits will encourage the banks to lend more and help to avert future banking crises.

Kevin Mountford, head of banking at, added: "The tide is definitely turning and the collective voice of the nation's army of savers is getting louder.

"Clearly, not much thought is being given to savers, whose returns are dwindling by the day.

"The bulk of people have been angered by Thursday's slap in the face from the Bank of England for what has been, in some cases, a lifetime of diligent saving.

"Many of these people need the income from their savings to get by and their desperation is getting to the point where they are questioning just what Gordon Brown and his Chancellor are doing."

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