Reduced Interest Rate for Savers.

Earlier this week Alliance & Leicester reduced the Interest rate on their e-savings account from 6.3% to 5%. As this is where we keep our emergency fund this has hit our family budget which gets the monthly interest. So hard cutbacks are being made in our household. No we are not prepared to see our hard earned savings wither away to help save somebody else's job by keeping our spending the same. Seems grossly unfair that the frivolous get rewarded and money to spend when people who have saved get hit.

Also I am not convinced it does any good as low interest rates drag the exchange rate down, which pushes up the cost of Oil, Energy and food. Especially bad for a country like the UK that
imports more than it exports.

We will see what the Bank of England does on Thursday, but further cuts are not going to help those with Tracker Mortgages which have a minimum percentage.

I am sure somebody in a few years time will get the Noble prize for economics for proving that zero interest rates don't help stimulate economy's, witness what happened in Japan.

Seems to me that the whole world has gone mad about the possibility of deflation. The exception being the German's ,who are sensibly not going to throw money at the problem. Knowing full well that a recession cannot be avoided and the end result is a high level of debt for the country. Much better to just rough it out.