No, it's a 0.25% cut, not a 7.5% cut. Don't fudge the numbers, mate. It's a cut of a quarter of one percent, nothing more extreme than that.
This. The rate has been reduced by 0.25% from 0.5%, resulting in a cut of 50% in the interest actually paid. If you are a prudent yet cautious person with savings, on a fixed income, using your interest income of £300 per month to pay bills, this leaves you with a deficit of 50%.
No, it's a cut from a rate of 0.5% to a rate of 0.25%. Every £100 invested earns 25p less a year. Whether that's from a level of 50p or £15, the actual reduction in interest paid is the same - 25p for every £100.
If you are earning £300 interest a month, at 0.5% your capital is £720,000. Hardly poverty line stuff.
Chaz "never knowingly prepared to give ground" ™ It's a simple difference between an absolute figure and a ratio. The Bank of England rate has been reduced by 0.25%, which is a 50% cut on the previous rate. To repeat your example, the same cut to a 15% interest rate would equate to 7.5%. Whatever, if you have looked after your finances and are debt free with some savings, you are being taken for a mug. I may be wrong but I thought you were an admirer of Thatcher, with all of her 'prudence' and irrelevant references to domestic budgeting. What we are seeing is the prudent being punished. For who's benefit? Not business, because the ****ing banks still aren't lending any of their money, which was apparently the point of this. The Bank is financing its £60bn of quantative easing by a reverse auction (buy back) of long term gilts. These are the things that banks, insurance companies and pensions like as they help them hedge against long term liabilities. So we are mortgaging our future, yet again, for some wing and a prayer stuff on the short term economy. Apparently the new Duke of Westminster will be paying virtually no inheritance tax on his £9bn windfall. Now there's a surprise.
Whatever way you want to paint it, it's an ACTUAL cut of 0.25 percent, which means a reduction in interest earned of 25p for every £100. That's the absolute figure, and the one that people will actually experience. Your figure of 50% is so high due simply to the very low interest rates we've had for years now. It actually doesn't matter a jot what the rate was before, and what it is now. The number that people need to focus on is the difference between the amount of interest they earned before and the amount they now earn - which is 25p for every £100 invested. Any debate on that will be tainted by hatred for bankers - something tangible, but not anything that will affect the actual numbers involved.
There's been so many figures thrown about in this thread may I quote Mark Twain? "There are 3 kinds of lies: lies, damned lies, and statistics."
The rate has been cut from 0.5% to 0.25%, a drop of 0.25%, Durbar. YOU stop. What is important is the AMOUNT of interest people will receive, not the starting point before the cut. And that has reduced by 25p for every £100 invested. That's the important number, not some arbitrary number based on what was already an extremely low base.
No, not 'whatever'. What's important to people is the monetary amount, not making some big political point over what's actually a very small move in interest rates from 'nearly zero' to 'very nearly zero'...
