Thursday, February 16, 2012

Bank rules out helping savers and pensioners because it 'would put us in recession'

The Bank of England has ruled out help for savers and pensioners and warned that any attempts it made to improve ‘negligible’ returns on their nest eggs would tip the economy back into recession.

Britain’s army of savers has been hammered since interest rates were slashed to a record low of 0.5 per cent three years ago.

Critics also claim that more than one million pensioners have been consigned to a life of poverty after the Bank unleashed a £325 billion money printing programme.

But Governor Sir Mervyn King said the drastic action was needed to prevent ‘a deeper recession than the 1930s’ when the world was crippled by the Great Depression.

The Bank’s quarterly inflation report also suggested that interest rates may stay at rock bottom levels until 2014 in a further blow to savers.

‘We are still steering a course through choppy waters, and many people are experiencing difficult times,’ said Sir Mervyn.

‘Many savers continue to receive negligible returns on their savings. Read More