Who does the base rate cut benefit?

[indebtstudent]

The way I see it it won't be passed on to customers, it merly gives the banks an excuse to cut savings rates thus protecting/increasing thier margins. Case in point Nationwide HAS increased its SVR but this is not available to new customers.

 

Overdraft, credit card and loan rates remain high. If we accept that bank rates have no link to the BOE base rate won't that have negative consequences for consumer confidence.

 

Also am I the only person that is alarmed at the fact that governments here and abroad seem determined to try to solve the problem by throwing money at the problem? If this doesn't work the kitty is empty (well moreso), so wasn't there a case for riding this out then spending money later when the wrost was over???

[eyeofhorus]

To be fair, interest on mortgages are low at the moment especially compared to the 80's when rates were 17%. Depoit accounts are now paying very low rates of interest but investments are still giving a high return and certainly will out perform a savings account.

[indebtstudent]

"and certainly will out perform a savings account."

 

Perhaps, perhaps not, but in the current climate who wants to take a risk?

[yourbank]

The way I see it it won't be passed on to customers, it merly gives the banks an excuse to cut savings rates thus protecting/increasing thier margins. Case in point Nationwide HAS increased its SVR but this is not available to new customers. What was the old rate and what is the new rate? My understanding is that it has cut its SVR by the same amount as Base rate. The savings rates argument for the bank I work for is nonsense because the savings rates are above base rate on a number of products, Savings Bonds, ISA transfers and Credit Card Accelerator.(all can give interest above base rate).

 

Overdraft, credit card and loan rates remain high. If we accept that bank rates have no link to the BOE base rate won't that have negative consequences for consumer confidence.

Rates on Credit cards, overdrafts are high if you use them, not everyone uses them. Loan rates are normally fixed at the point you take them out.What about LIBOR? You haven't mentioned that.

Also am I the only person that is alarmed at the fact that governments here and abroad seem determined to try to solve the problem by throwing money at the problem? If this doesn't work the kitty is empty (well moreso), so wasn't there a case for riding this out then spending money later when the wrost was over???

 

Not if the worst can be avoided. This is a short term issue which for some people will have long term ramifications. To answer a post further down this list, it is the ideal time to invest. Most investments are for a period of 5 or 6 years. If I was a betting man I would be buying shares NOW or investing NOW because history tells us that the market will recover.

[indebtstudent]

I agree it may be a good time to invest but there again it may not financial advisors have disclaimers saying in effect even though all the advice I gave you is based on the past the past is not a reliable indication of future performance.

 

My main point is if hefty base rate cuts don't have the desired effect this says to the public we can't do anything about this. This is IMO not a good impression to make.

 

Wheres that other poster whos saying I've come to accept if debt is the problem then repayment is the solution, I'd like to see that persons comments...