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Interest rates stay down, no help for savers in the budget...

Anybody with a tracker mortgage will no doubt be happy that the Bank of England has kept interest rates at their all time low of .5% today, but there’s no light at the end of the tunnel for anybody hoping to get a good return on their savings. The media is reporting that Alistair Darling has thrown cold water over Gordon Brown’s plans to help savers in the next budget. There’s little hard detail on what exactly Brown was proposing, but it all seemed like fairly wishy-washy stuff such as increasing the amount of money you can hold in a Individual Savings Account (ISA) – which would largely be pointless because putting an extra £1,000 into an ISA...

posted on: Apr 9, 2009 | author: Lance

Basic guide to Quantitative Easing

This is an article that I could have written a few months ago, when the Bank of England stated its intention to begin ‘queasing’. But it has become rather more relevant now that one of the pronouncements of the G20 summit is that the International Monetary Fund (IMF) will itself begin to ‘print’ additional SDRs (Special Drawing Rights, effectively the IMF’s own currency) which its contributor countries can draw down in the shape of dollars, euros, etc. Note my use of the word ‘print’ in the above paragraph. The days when first world countries used the printing press to increase the volume of money in circulation have long gone, assigned to eras such as Weimar Germany. Paper and...

posted on: Apr 4, 2009 | author: Alex

National Savings and Investments cuts Premium Bond prizes...

Buying Premium Bonds from the government owned NS&I has long been viewed as the safe alternative to stock market investment for the British public; you get to keep all of your original capital, you stand a chance of making a million, and an even better chance of winning a smaller amount. But if you’re one of the thousands of people eagerly awaiting the monthly Premium Bonds results from Ernie, you’ll be disappointed to learn that since interest rates have been cut to historic lows, NS&I has been forced to slash the prize fund, significantly reducing your chances of winning a big prize. The Premium Bond prize fund has been cut from almost £60 million down to £32 million....

posted on: Mar 18, 2009 | author: Lance

Penny drops in Whitehall – some people like to ’save’ money...

There’s been a noticable change in the noises coming from our politicians over the past few days. Up until recently, they seem to have been largely preoccupied with helping ’struggling homeowners’ (i.e. baling out the simpletons who bought houses they couldn’t afford) and ‘restoring confidence’ (i.e. convincing people it’s safe to keep digging themselves into debt to by crap they don’t need, because it’ll probably all turn out ok in the end). But now there seems to be a slow, creaking realisation that all these proposed measures designed to encourage irresponsible borrowing and reckless lending might not be very helpful for the financially prudent members of society who cling to silly outdated notions like ‘living within their means’...

posted on: Jan 6, 2009 | author: Lance

Where to put your savings in today’s low interest rate economy...

I’ve been waiting to finish this article until the UK’s inflation figures were released. They show the CPI figure for November to be 4.1%, higher than predicted by the majority of economists. This figure is more than double the 2% target that the Bank of England’s Monetary Policy Committee is supposed to aim for, yet the UK’s interest rates are falling rather than rising. (Incidentally, a fall in the rate of inflation doesn’t necessarily mean that prices are falling. That is one possible interpretation, but alternatively it could mean that prices are continuing to rise, just not as quickly as before. Newspaper articles rarely make this distinction, unfortunately.) Of course, the MPC would say that it is targeting...

posted on: Dec 17, 2008 | author: Alex

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