Savers can relax, but now its all eyes on the MPC

Kevin Mountford, head of savings at moneysupermarket.com commented: "I think that UK savers can now relax. The Chancellor has acted this morning, and whilst he has stopped short of offering an actual guarantee to savers he has made it clear that no Heritable Bank or Icesave customers in the UK will lose any money, even on balances over the FSCS limit. So it really is a case of actions speaking louder than words. I don't see any reason why UK savers should fear for their funds any longer. However, it is absolutely vital that the FSCS now pays compensation to savers within days rather than weeks or months.

"All eyes will now turn to tomorrow's MPC decision. The Chancellor has made it clear that the Bank of England needs to be mindful of the wider health of the economy, as well as inflation - which looks like a clear signal that he is expecting them to make a cut. Whilst 0.25 per cent drop in the base rate would be safe and predictable, the question remains whether they will be bold and make a cut of 0.5 per cent or even more. Millions of borrowers on tracker mortgages would benefit immediately but there is some doubt whether a cut would have much impact on the rates or availability of mortgages to new borrowers."