BSA: Bank of England decision offers little help to borrowers or savers

BSA: Bank of England decision offers little help to borrowers or savers

BSA: Bank of England decision offers little help to borrowers or savers

The Building Societies Association (BSA) has criticised the decision by the Bank of England to cut the base rate by 50 basis points to 1%, saying that it will harm both savers and borrowers.

Commenting on the decision, Adrian Coles, Director General of the BSA, said:-

“The rate cut is an assault on savers who will have seen their interest payments drop by 83% since July 2007. Savers dependent on interest income have not seen prices fall by a similar amount – their lifestyles have taken a significant blow.

“But the decision is also bad news for mortgage borrowers. Although the cut will benefit borrowers with tracker or variable rate mortgages, research by BSA has found that concern over getting a mortgage or getting a large enough mortgage is a much greater worry than affording mortgage repayments.

“Against such a background, today’s decision means that people are less likely to save and the flow of funds into the mortgage market will be further disrupted.”

~ Ends ~

1. The Building Societies Association (BSA) represents all 55 building societies in the United Kingdom. Building societies have total assets of £380 billion and, together with their subsidiaries, hold residential mortgages of £250 billion, more than 20% of the total outstanding in the UK. Societies hold about £235 billion of retail deposits, accounting for more than 20% of all such deposits in the UK. Building societies also account for about 37% of all cash ISA balances. Building societies employ over 51,500 full and part-time staff and operate through more than 2,000 branches.

2.Photographs of Adrian Coles are available from the BSA press office, or from the Association’s website at www.bsa.org.uk or Headlinemoney www.headlinemoney.co.uk

3.The research quoted is the BSA Property Tracker survey from You Gov plc. Further details can be found at : http://www.bsa.org.uk/mediacentre/press/bsa_property_tracker_dec08.htm

Neil Johnson
Mortgage Policy Advisor
Building Societies Association
Tel : 020-7520 5903
E-Mail : neil.johnson@bsa.org.uk

The Building Societies Yearbook 2008-09 is now available – http://www.bsa.org.uk/publications/industrypublications/yearbook0809.htm

THE BUILDING SOCIETIES ASSOCIATION

Website: www.bsa.org.uk