No more useless rate cuts please!

The Bank of England took another bold step today and slashed interest rates from 3% to 2%.

The reduction in the cost of borrowing has been widely flagged. But consumers don't want any more reductions. Six out of ten (64%) people say another cut in rates will not help, according to a poll by money website Fool.co.uk.

People aged between 18 and 25 are least likely to benefit from a rate cut.
Only one in seven (14%) believe the reduction will help.
Those aged 58 and over are also sceptical about another cut in rates.
Eight out of ten (82%) say more rate cuts will not help.

David Kuo, Head of Personal Finance at Fool.co.uk, says: "The 1% cut in rates has brought the cost of borrowing down to levels not seen since World War II. However, it is unclear whom the rate cuts are supposed to benefit.

"It won't assist people with fixed-rate mortgages, pensioners, savers, people with credit-card and store-card debts, first-time buyers who are hoping to get on the housing ladder, and people who are about to buy annuities.

"But it is important that consumers do not take their eye off inflation in these difficult times. The value of sterling has fallen 30% against the US dollar, making imports more expensive. So any gains they may make from the interest swings will be lost on the inflation roundabouts.

"Consequently, it is vital at this time to ensure that any savings you have are properly invested. Ironically, the stock market is always thought of as being risky. But when the risk associated with insuring UK Government debt is higher than debt issued by a chocolate maker, then it's time to re-think where you want to keep your money."