Finance, Forex and Investments

Why are interest rates being set to bail out financially irresponsible homeowners at the expense of savers?

With prudent savers having their savings eroded by inflation, should the Bank of England increase the interest rate back to 5% at the next MPC meeting? Or will they opt to keep rates at 0.5% (or a small 0.25% rise), thus abrogating their responsibility of keeping inflation below 2%?

Public Comments

1. Whereas an increase in interest rates will benefit savers at the expense of homeowners with mortgages. No problem guessing which side of the argument you are on, but since the problem is either you earn less interest or mortgage holders pay less interest my view is quite simple. No one is ever going to be happy all of the time and there is nothing the Bank of England or the Government can do about that. Can't help but note that the whole two percent target was imposed by the Government. I would wonder what, exactly, the average politician actually knows about how it works. Considering our esteemed Chancellor is one of those without a solitary financial qualification I would wonder why the Government is allowed to make demands like that at all.
2. Interest rates are being set so low in the United States so the government can continue blowing money.
3. Oh, let's bail out the banks but not the people they diddled. You make a lot of sense. A lot of those homeowners were bilked by the banks. You know how to read a newspaper, right?
4. There you are. You have it down to a "T". Interest rates only helped out the irresponsible homewoners at the expense of the savers. That my friend is a load of B******ks. Why do I say that? Because I own my home outright, no mortgage anymore and my savings are nearly worthless now. I do know a lot of people who are in the opposite boat though and they are definitely not irresponsible. The lower interest rates only helped the banking section and big business to borrow more and pay a lower rate while they kept their interest rates to borrowers the same or higher. Bad debts? These are the people who made the bad debts and with the politicians they pay by putting money into those politicians party funds to be able to do it. The only thing I'm struggling with is the taxes to cover the so-called losses of the bankers and politicians while they carry on as usual. Plus I might add the high price increases of products such as food and oil while there is no need for those increases and IS just a rip off to increase profits for the ones who are MAJOR shareholders. Try to think about it logically and you just might change your tune. No my friend, the people borrowed money to buy their houses on the advice and need of the politicians and those banks who contributed to the party funds. It was a way for them to make more money and when it all went down hill because they gambled and got it wrong they forced the rest of us to bail THEM out, not the other way round. The fall out for them is that some homeowners with mortgages do get a bit of help out of the lower interest rates but then the banks and businesses take it all back in other ways. That is why they are posting ever higher profits and raising wages and paying out extravagant bonuses for failures they commit. If you are losing money then it only shows that you bought shares in companies that you shouldn't have. Other than my savings are losing interest or were I should say I am doing well thank you. Try getting your savings out of an international bank or one from the UK, EU or US and I think you will find you will do ok. None of that load of thieves will ever get the chance to put their dirty paws on mine again. Unless you are filthy rich it is the only chance you have of recouping some of your losses.