We need to see a lot more of this and not just in the UK. The banking groups even admit that they're squeezing people (both savers and borrowers) and that they have to make money somehow. Well, how about cutting back? You know that's the first thing they would tell everyone else, much like the GOP in the US or the Tory's in the UK. Are we really seeing the banks economize? Just because they're cutting back on their posh holidays parties and sending employees packing with with hundreds of thousands instead of millions doesn't mean they're serious.
Gordon Brown said the Government would hold another round of talks to urge them to lower their rates for borrowers. "Remember last time there was a cut, we had to speak to them before it was passed on and we will be speaking to them again," he said. The Prime Minister dismissed criticism that savers, including many pensioners, are seeing their incomes squeezed by low interest rates. "What I would be worried about most is if we had inflation going up and taking away the value of people's savings," he said in a television interview yesterday. "The interest rate going down is necessary to get the economy moving again. If you are a saver the best protection you have is that inflation is kept low."
Alistair Darling, the Chancellor, added: "It really is important that we see these reductions passed on because that is the best way of helping the economy get through this difficult time."
Banks faced further criticism as it emerged that first-time buyers and people who remortgage newly-bought homes face an interest rate of about 6 per cent – three times the new base rate. Moneyfacts, the personal finance publisher, said banks were making considerably more money from their fixed-rate mortgages than a month ago. But Angela Knight, chief executive of the British Bankers' Association, said: "The cost of funds to lenders and the rates they charge to borrowers depend on a range of factors, of which base rate is one."
Sir Howard Davies, the Bank's former deputy governor, said the Government should stop trying to dictate terms to the banks. He said: "The banks have got to raise money both from depositors and indeed from the inter-bank market."
