Practically Classics Forum

Just got my statement from Nationwide Building Society. I'd frame it but it would cost more than it's worth. Certainly the interest won't cover the framing!
Apparrently one in six people in the UK have a mortgage, so rates are kept artificially low, despite inflation.
Hang on... doesn't that mean FIVE IN SIX people might benefit from a rise? I might be able to afford a chocolate bar by next year..

We're getting similar returns from our savings, but I'd not want interest rates to rise just yet.

Interest rates are a blunt instrument to control growth in the economy, and if you look at the country's economy as a whole the last thing we need right now is a brake on growth, that would just about finish us off IMO.

The dilemma facing the government is that interest rates are also often used to control inflation, and that is higher than it should be at the moment, which is a worry. It's not higher due to out-of-control wage increases though, it's higher due to high fuel prices amongst other factors, so in this case I don't think an interest rate rise would affect it much anyway.

On a personal level, there may be fewer people that have loans as opposed to savings, but the total value of those loans far outstrips savings, so overall people would be worse off with an interest rise.

Note - before we go any further with this topic, can we keep politics OUT of this forum please. Economics yes if you wish, but no political rants please. Ta!

banks can afford to pay more interest on your savings but don't want to, check out bank lending rates against what you are getting.. credit cards are worse and payday loans are extortionate up to 3500%.
if we want something we save or go without.
when i sold my house 7 years ago i put 130 000 in lloyds for a month & got an extra 19p... when i bought my car 14 years ago i paid 16% interest, i paid the loan off in half the time & the manager asked if i wanted to borrow more it would be no problem. i politely declined his offer...

I have no savings.

Mortgage,overdraft,credit cards and loans though.
So I'm glad rates are low.

Makes me laugh when people grumble about interest rates, my boss who has more than a few quid stashed away grumbles about only getting XX% on savings.......well its a fact your getting more than if it were stashed under your bed, so you are in fact getting something for nothing...literally.

Interest rates are much the same in Australia.

But I have a morgage offset account where I deposit my savings. That way I effectively get 7% on my savings without having to pay tax on it.

jimmyybob wrote:Makes me laugh when people grumble about interest rates...//...you are in fact getting something for nothing...literally.

How so? Interest is below inflation, so even the sub-1% on a typical easy access account comes close to keeping up with your outgoings. Still, I'd bet that's one comfy mattress though but.

I hope we don't see a return to the situation where savings are wiped out by inflation. On of the ways banks make a profit, is the margin between deposits and loans; let's hope the banksters aren't too greedy Having said that, I hope to win the Lottery

Martin Evans wrote:I hope we don't see a return to the situation where savings are wiped out by inflation.

Eh? I'd like to see an investment interest rate that's higher than inflation right now - tell me, I'll put all my money there!

Ideally yes, wouldn't we all but higher returns usually carry higher risks. With rates being as low as they are, savings are being devalued, even where the funds have not been put into speculative investments.