Money News

Pressure group asked BoE to raise interest rates

Thursday 7 July, 2011

By Martin Fagan - news@consumerchoices.co.uk

Save Our Savers write to Bank of England imploring a rise in interest rates.

In the weeks leading up to today’s meeting of the Bank of England’s Monetary Policy Committee (MPC), each of the committee’s members received letters from pressure group Save Our Savers pleading with them to raise interest rates.

The letter argued that not only would a rise in rates give savers a boost, but would also bring down inflation which would further help savers.

However, the Committee voted today to keep rates at 0.5%.

Save Our Savers estimated that the real value of the country’s savings has fallen by over £50billion in the past 12 months and the pressure groups said that, with an effective transfer of wealth from savers to borrowers, the thrifty and the responsible are involuntarily subsidising the profligate and foolish.

The letter outlined that savers and those on fixed incomes, such as pensioners, were “suffering terribly” from the combination of extremely low interest rates and above-target inflation, saying this was not a temporary setback, but that its effect would permanently reduce the value of future incomes.

“A country without savings is a country without a future,” said Jason Riddle, co-founder of Save Our Savers.

“We have written to the nine members of the MPC, highlighting the pain being endured by savers and those on fixed incomes. On Thursday, we expect they [the MPC] will reply by keeping the bank rate at 0.5% and savers will know that the misery is set to continue.”

At Midday today, it was announced that the Monetary Policy Committee had voted to maintain the Bank of England base rate at 0.5% for the 27th month in a row.