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Savers’ group lobbies MPC for rate rise
Campaign group Save Our Savers has called on the Bank of England’s Monetary Policy Committee to raise rates and help prevent savings being eroded by inflation.
Simon Rose, spokesman for the group, said: “The Bank’s policies have led to a fall of 25 per cent in the value of sterling since 2007 putting upward pressure on inflation, which is higher than in the US and Europe.”
His comments came as the MPC decided to keep base rates at 0.5 per cent for the 33rd successive month.
Mr Rose said the MPC must consider raising rates because retail price inflation was at a 20-year high of 5.6 percent, while consumer price inflation was 5.2 per cent, both way above government targets.
He claimed if inflation and interest rates remained at the same level, there would be a net loss to savers of £43bn in the next 12 months. He said the Bank’s policies were helping nobody “except those who have borrowed unwisely”.
Mr Rose added: “If it were announced that £43bn a year would be confiscated from those who are prudent and trying to save for their future, and given to the rash and imprudent who contributed to our current financial state, there would be uproar.
“But this is exactly what is happening, except that it is happening by stealth thanks to the Bank undermining the value of the pound.”
Melvin Bell, investment manager for Tyne and Wear-based Lowes Financial Management, said: “Raising interest rates will kill whatever growth the UK economy has. The only reason to raise rates will be to stifle inflation and with, VAT to drop off in January, inflation is likely to drop, at least slightly in the coming months.”
