The Bank bailout will hit your savings rates - MSN Money UK- Cash Plus Money Loan
The Bank of England (BoE) is making a massive £50 billion in extra loans available to UK banks, which can pledge top-quality AAA-rated mortgages to the BoE and get Treasury bills (T-bills) in exchange. Moreover, the way it is priced gives banks a strong incentive to lower the LIBOR rate at which they lend to each other, a rate which has stayed stubbornly about 1% above base rate in recent months and which needs to fall back to converge with the BoE base rate for money markets to be judged as “normal” again. At the moment, lenders simply cannot raise all the cash they need to support new lending - that is why they have been aggressively raising savings interest rates despite the latest cut in base rates. Banks continue to tighten lending criteria - both demanding higher interest rates on mortgages above 80% Loan-To-Value and restricting maximum loans using lower income multiples or tighter ‘affordability’ criteria. Find Out More
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