Franky on Finance

Some are questioning whether the financial turmoil has rendered the Bank of England powerless to direct how much the biggest financial names on the High Street charge for credit and pay customers for their deposits.  For many, today’s predicted cut in base rate will be meaningless.  While banks and building societies have been cutting savings rates, they have also been raising mortgage rates for new borrowers.  The only people to benefit would be existing mortgage customers on the track rates which follows the movement of the base rate.  The current market turmoil could however be providing banks and building societies with the opportunity to rebuild their profit margins after being hit (at various levels) by the subprime market.  Once again, the consumers are paying for the cost of the financial industries’ imprudence.