Socialist Worker

Interest rates: the cuts don’t work

Issue No. 2127

The Bank of England announced a record interest rate cut of 1.5 percent last Thursday – cutting interest rates to their lowest level since 1955.

Many welcomed the move, thinking that it would ease the pressure on ordinary people struggling with mounting debts and rising mortgage payments. But for most people it has made no difference.

Bank bosses met chancellor Alistair Darling to tell him they would not pass on the interest rate cuts to customers because they were “not charities”. These are the same banks that have been given a massive £500 billion bailout by the government.

Banks have also increased interest rates on debit and credit cards. The average annual rate for credit cards has gone up from 17.2 percent in May to 17.6 percent today.

When the banks claimed they had no money, they got handouts from the government. But when ordinary people have no money they face rising charges for borrowing and harassment from the banks.

Northern Rock, the first bank to be taken over by the government, stands out for its aggressive approach to people facing problems paying their mortgages.

These double standards show how the banks and the government are treating ordinary people with contempt.

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What We Think
Tue 11 Nov 2008, 18:22 GMT
Issue No. 2127
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