Interest Rate Cut Will Only Benefit Bankers

One morning over the weekend I expect Gordon Brown woke up to be hit in the face by a Tsunami of shock and horror that left him feeling nauseous and dizzy. The Prime Minister must have realised at some point that his interest rate cut, intended to boost the economy by encouraging banks to lend money they haven’t got to people who can’t repay their current debts, had no strings attached.

There is nothing to stop the bank borrowing money at 2% interest to repay the money they borrowed at 4% interest. Furthermore, the banks are not obliged to pass on the cut in rates, so while reducing their interest payments to 2% they can carry on charging between 11% and 150% or more to people who owe them money. The bankers simply trouser the inflated profits in the form of obscene bonuses.

The worry for Gordon is how can his spinners and slimers (Am I thinking of someone called Mandy? That’s for me to know) keep the punter from realising they have been stitched up. If they only had Cameron’s dimwits to worry about it would be a cinch, but there’s not much gets past Vince Cable.

While Gordon frets then it’s great news for the bankers who seldom look ahead beyond next month’s interim bonus. No Cava for them this week, the Dom Perignon will be flowing in the city again by the end of the week.

As far as you and me are concerned, if we don’t fancy washing down our Christmas dinner with Rola Cola, that famous supermarket drain cleaner Mum’s always claim is “the same stuff but half the price” we can always sip tap water, which in some areas had been recycled several times but at least has been passed by public health officers* before being piped to your home.

The other downside of the interest rate cut is that those of you who were thrifty and saved your spare pennies can no longer gloat that people who chose more speculative investments are cleaned out. With inflation past 4% and rising and interest likely to go below 1% the safest savings account holder is being cleaned out too, but more slowly and painfully.

The real winners are the silly buggers (I’m mentioning no names here) who enjoyed their money in the good times and now have lots of great memories help cope as they work out if it will break them to buy some own brand vodka and zap up the Rola Cola.

*Thanks to the Greenteeth Multi Media tired old jokes department for that one.

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