Well done Mr. Carney ….
28 November 2013
… for focussing Funding for Lending on business loans – which is what it should always have done.
At long last some relief in sight for savers?
The Bank of England’s announcement today that the Funding for Lending scheme will only be available for business lending, not mortgage lending, is fantastic news. At long last, there seems to be a recognition that there are real dangers of a housing bubble based on unsustainably cheap mortgages and that the real problem in bank lending has been for small firms. Whether or not the recent revelations of poor practice by banks has led to this sudden announcement is not important, but the news is really great.
SMEs have been starved of loans for the past few years, whilst banks have refused to lend to them on reasonable terms, even after Funding for Lending started. Banks have failed to offer reasonable terms to small firms, often imposing high fees or draconian collateral requirements that have made it impossible for these businesses to borrow the money they needed.
Bank of England figures show clearly that banks have not been playing their part in lending to support growth for smaller enterprises and far too much of the increase in lending has been based on mortgage loans. This has caused distortions in the housing market, has pushed up rents and runs the risk of a painful period ahead when interest rates normalise.
Savers have also suffered as a result of the banks’ focus on using funds from FLS to drive mortgage lending. In effect, banks no longer needed savers money and could fund mortgages without having to pay for savers’ deposits. From next year, however, mortgage business will require other sources of funding, so perhaps banks will start offering savers better deals. It is too soon to pop the champagne corks just yet, but hopefully there will be much better news in 2014.
There was a dramatic drop in savings rates straight after FLS began and a return to higher saving rates is long overdue. Interest rates are still lower than inflation for most savers and as the economy is growing strongly now, a rate rise is likely sooner or later.
Well done Mr. Carney for finally focussing Funding for Lending on business loans, which is what is should always have done.
3 thoughts on “Well done Mr. Carney ….”
FLS ending for residential supposed to help Savers is poppycock, our B. Society KRBS has just announced another cut of 0.4% starting Jan 14, just as residential FLS is curtailed. Their CEO Andy Golding intimated months ago to me that rates were low because they had access to FLS, guess what? KRBS have not even signed up to it!! He also says he empathises with Savers yet on his numerous blogs he doesn’t mention Savers.
KRBS calls itself a Mutual, Mutuals are B. Societies who are supposed to re-distribute their profits to members, ie Savers and Borrowers, they set the rate it pays to savers at just less than the rate charged to Borrowers. Not so with greedy KRBS, whose margins on Savers’ and Borrowers’ rates have widened up to 5%, and increasing it’s profits at our expense.
Meanwhile the Liar Loans Fraud propping up dishonest borrowers is never investigated.
Yes ‘we are all in this together’ say Cameron and Osborne, when in fact it’s the Government, Treasury, BOE, Regulators and Banks.
So this is Mutual and this is Empathy??
Without a shadow of doubt Carney is Osbournes puppet determined to rob every saver with total impunity and that ghastly smirk on his face.
Its very clear not one person in the Treasury or the B of E is capable of using a calculator or realising that robbing savers has already lost the country 500bn which dwarfs the 375bn splashed out in QE right into the hands of the rich who of course promptly spent it abroad on property so absolutely no benefit to the UK or GDP. Add on the tax that savers no longer pay and the growing queue of pensioners now forced to claim Pension Credit and the figures simply do not and cannot add up.
Private pension funds are a joke and annuities are way down so yet more lost income , spending and tax will ensue.
They also ignore that many pensioner/savers were able to help their grandkids but now cannot even think about buying Xmas presents.
This winters fuel bills will add furthur insult to injury .
Far too many Banks and B Soc are offering mortgages at such stupid rock bottom rates that savers sure never enjoyed that the end result will be millions of repossesions as soon as the housing bubble bursts, Cameron, Clegg, Osbourne have all reneaged on their promises to help savers and Carney has now stuck a dagger into the hearts of savers so deep that they will never recover and nor will this lousy government in 2015
To the 24 million Savers who outnumber borrowers 6-1, remember to abstain from voting or vote UKIP to give this awful Tory party and it’s weak coalition partner a bloody nose for lying to Savers in their election manifesto, and then remove it from their website.
This coalition has supported mortgage fraudsters, with almost half of all mortgages given from 2005- end 2008 to underpin the housing market. Meanwhile they have robbed 24 million Savers.
The Tory party will never get our votes again!