Gas profits won't stop price hikes
Living standards of hard-pressed pensioners in the West and those on fixed incomes could fall further, due to a double whammy of more gas price rises and even lower rates of return on savings.
British Gas owner Centrica was yesterday criticised as it announced higher profits, months after raising bills.
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The Bank of England’s Paul Tucker talked of negative interest rates yesterday
It yesterday refused to rule out further increases later this year.
The controversy over Centrica’s profits came as it emerged the Bank of England said negative interest rates should be considered.
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A negative interest rate would mean the central bank charges banks to hold their money and is designed to encourage them to lend out more of their funds.
While banks would almost certainly not directly charge savers to lodge their money with them, it is widely believed they would pass on the costs through higher current account fees and lower interest rates.
Bank of England deputy governor Paul Tucker told MPs: “This would be an extraordinary thing to do and it needs to be thought through carefully.”
People who planned to fund their retirement via savings have already endured years of low rates of return as interest rates have stayed at close to zero.
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