The government’s representative in South Swindon, Ms Snelgrove seems to think that building societies can survive without savers. The Nationwide Building Society has said that, for its tracker mortgages, it will not follow further Bank of England interest rate cuts. It is doing this to protect its savers.
Savings rates are at an historic low and this move means we will not be forced into a position where we could have to cut savings rates more aggressively than we would otherwise like to
Without savers, there can be no mortgages and if interest rates fall further, the more savvy savers will find other things to do with their money. This rather basic economic truth seems to be beyond Ms Snelgrove’s comprehension.
Should there be a further cut in interest rates I will be talking to Nationwide about what it can do to pass on the cut to customers…. It is important that lenders pass on interest rate cuts – we need to do whatever it takes to help businesses, people, and the wider economy in Swindon.
One of the reasons the economy is in its current mess — apart from this government’s profligacy with our money over many years — is that people borrowed far too much and saved far too little. Demanding that financial institutions punish rather than encourage savers will do nothing to improve the long-term health of the economy, nor will it increase the availability of mortgages.
Writing as someone who is not only one of Ms Snelgrove’s constituents, but who also has both savings and a mortgage with the Nationwide, I’d prefer further interest rate cuts not to be passed on, thank you.