Bank of England move was a step too far

Thursday's Bank of England decision to cut interest rates has proved to be extremely unpopular with the electorate.

Over two-thirds of people were angered by Thursday's half per cent rate cut in a poll of 16,857 moneysupermarket.com users.

Louise Cuming, head of mortgages at moneysupermarket.com, said: "This could well be the time for the rate cuts to end.

"If lenders show they aren't going to drop rates any further then it is pointless the Bank of England deciding on any further cuts. We need the financial stability that comes from a solid banking sector, but banks are being urged to offer high rates to savers and lower rates for borrowers - the sums just don't add up.

"The main thing holding back the housing market is banks' lack of appetite to lend. This will not change with lower Bank of England rates. The Government needs to concentrate on freeing the flow of money and decisions by the Monetary Policy Committee will not make this happen.

"These are tough times for savers - and future banking crises can only be averted if the level of savings increase."

Kevin Mountford, head of banking at moneysupermarket.com, said: "The tide is definitely turning and the collective voice of the nation's army of savers is getting louder. Clearly, not much thought is being given to savers, whose returns are dwindling by the day.

"The bulk of people have been angered by Thursday's slap in the face from the Bank Of England for what has been, in some cases, a lifetime of diligent saving. Many of these people need the income from their savings to get by and their desperation is getting to the point where they are questioning just what Gordon Brown and his Chancellor are doing.

"It has never been more important to shop around - gone are the days where accounts paying six or seven per cent were plentiful. With the average rate at just 1.43 per cent, vigilance is key and variable rates can drop like a stone.

"There are still some good deals to be had though, especially if you're prepared to lock your money away and fix the rate. Anglo Irish and ICICI are offering 4.6 per cent or more on fixed rate bonds, and Nationwide has a fixed cash ISA at four per cent.

"For those who usually have spare cash at the end of the month, a regular saver account can be a great idea. Barclays and Norwich & Peterborough both offer six per cent on user-friendly accounts."