Lending rates hit all time highs
Banks are squeezing households by record amounts with high interest rates on overdrafts, mortgages and credit cards, despite the Bank of England base rate being at an all-time low.
Figures from the Bank of England (BoE) show that the gap between the interest being charged on the average mortgage and the central bank’s base rate of 0.5 per cent are the highest since records began in January 1995 Photo: REX FEATURES
Figures from the Bank of England (BoE) show that the gap between the interest being charged on the average mortgage and the central bank’s base rate of 0.5 per cent are the highest since records began in January 1995.
The average lending rate on overdrafts is 19.5 per cent, also the highest since comparable records started.
Credit card holders are also being hit. The average interest rate being charged on credit cards is 17.3 per cent, the highest for 11 years, the BoE said.
Experts accused banks of profiteering at a time when lending rates should be low. The BoE’s base rate has been at its current low rate for three years.
Lord McFall of Alcluith, the former chairman of the Treasury Select Committee, said that the public are losing trust in the banking sector.
WHO KNOWS THE REAL TRUTH?
His main contribution to the economics debate of the time was in putting together a coherent critique of the existing classical economic theory that dominated policy-making circles. Keynes' father was an economist and his mother was Mayor of Cambridge for some time.
Keynes went to Eton (as a scholar) and then went on to King's College Cambridge to study Classics and Maths. He worked for a short time in the Civil Service but didn't like it much, and so left and went back to Cambridge as a Fellow. In 1911 he was made editor of the Economic Journal - Britain's foremost economics publication.
He was a varied character - not at all the stereotypical economist of people's assumptions. He married a Russian ballerina and was for much of his time a member of the Bloomsbury Group - a group of intellectuals whose ranks included well-known names such as Virginia Woolf, E.M.Forster and Bertrand Russell. He speculated considerably and as Bursar of King's College made the college very rich! He also acted as an advisor to a number of companies. In the Second World War he made his peace again with the Treasury. As a result he was instrumental in providing the framework for post-war economic recovery.
Economists - Friedrich August von Hayek (1899-1992)
Hayek, like Friedman and most other Monetarists was a great believer in free markets. Also like Friedman Hayek was awarded the Nobel Prize in Economics. This was given jointly with another economist called Myrdal in 1974 - just after Friedman received his Nobel prize. However, there the similarity ends - initially. Hayek, as you can guess from his name is Austrian and so is often considered as being a part of the 'Austrian school'. He was a passionate opponent to Socialism and along with another economist called Ludwig von Mises formed the Mont Pelerin Society. This society was pledged to give individuals the freedom to make their own economic choices and campaigned to make people aware of the dangers of Socialism.Hayek was born in Vienna and from 1927 until 1931 was Director of the Austrian Institute for Economic Research. However, he was then drawn to the English-speaking academic world initially at the London School of Economics, but then at the University of Chicago from 1950 until 1962. Here the Monetarist connection becomes clear, as the Chicago School of Monetarists at Chicago University was where Friedman was based.
Hayek returned to Austria as a Visiting Professor of Economics at the University of Salzburg in 1969. For more details on his work and theories follow the links below.
