While many consumers welcomed the Bank of England’s announcement that it was setting the base interest rate to 0.5 per cent 30 months ago, many savers have grown weary of the historic low rate, hoping that the BoE will soon raise the rate to curb inflation.
Many business bank account holders welcomed the base rate reduction originally, due to the lowered variable rates on their business loans and mortgages. However, many savers have seen their savings pots dwindle away due to rock bottom interest rates and rampant inflation.
A recently conducted research survey has discovered that more than 50 per cent of consumers in the UK have high hopes that the BoE’s Monetary Policy Committee will vote to raise the base interest rate. The survey respondents cited several reasons for wanting a rate increase, such as being able to get more lucrative returns on their savings, which have suffered quite badly over the past 12 months.
Other savers said that the main reason they wanted the base rate adjusted was in order to combat the soaring inflation rates that have been wreaking havoc with savings pots. One industry insider went so far to say that, with the BoE’s base interest rate languishing at an historic low for the past thirty months, savers have been on the losing side of the equation due to rising inflation and low interest rates.
The big winners have been a handful of borrowers, the industry expert said. Those who had variable rate mortgages with large deposits have benefited, as well as those who seek to borrow more substantial amounts on personal and business loans, though banks have come under fire for not doing enough to grant access to finance to viable firms who are in search of loans to grow or rebuild their businesses.