Interest Rate Decision Today

[Mich the Tester]

IMO

For what the governments around the world are trying to achieve (ie more cash flowing around the system), cutting interest rates has to have a greater effect than most of the other measures they've tried such as the pathetic cut in VAT and underwriting or guaranteeing loans.

If I have more money in my pocket and I'm not going to earn didley squat by saving it, I have two options;

1) Pay off existing debts (my current option) increasing the banks liquidity and allowing them to redress their balance sheets deficits.

2) Spend it, thereby increasing the money spent on the high street, reducing company failures and subsequent redundancies.

Once they've run out of reductions in interest rates (which is just round the corner), the only other way to carry this on would be tax cuts, which the government cannot now afford!

3) Save it, accepting almost no returns except that your money is worth more due to deflation.

[Bear]

I wonder what it will be?

Does anyone care any more?

Is it possible for savers to get less reward than they are at the moment?

I care - I have 2 tracker mortgages - I now pay about £1500 a month less in interest than I did 6 months ago!!


Edit: about £1700 a month less - 0.5% cut

[Gonzo]

Rate cut to 1% - who'd have thought it?


EDIT - I see Brillo beat me to that announcement in another thread.