Admittedly, I’m not exactly a trained economist, but it doesn’t take one to spot that despite lowering interest rates four times to their lowest ever levels, banks still won’t put their own money into the system, and consumers won’t spend.
In the meantime, sensible consumers who didn’t buy huge houses they couldn’t afford during the good times and instead saved, are now being punished by interest rates so low they’re not worth bothering with. My tax-free savings account now attracts a woeful interest rate of 1%, which is a pretty useless rate – and the top-earning equivalent only gives you 3.6% interes – and even then, a previous bank kept “losing” my application for their ISA account.
It’s almost as if the government wants me to blow my savings on a wild spending spree in the economy – and then rely on the welfare state when the inevitable still happens and I lose my job. Because the banks certainly aren’t going to keep saving interest rates high, and mortgage rates low – so who else can pump money into the economy? Surely the only thing left to do is for the government to start actually spending its money on the country, providing jobs, instead of propping up an increasingly irrelevant banking system?