Thursday, 12 July 2007

The rise in interest rates.

I am amazed that the Bank of England is allowed to put up interest rates, to curb inflation while the railways are allowed to put up their fares by 30% above inflation. Lets us not forget that the railways for all their blustering are still subsidised by the tax payer, so in fact we pay twice. Where does this money go, as I thought that the whole point of privatisation was the need to raise investment, to lower the prices and make the service more efficient. I understand that the trains are slower now than a hundred years ago. So much for the price of progress. Surely the time has come to reevaluate the idea of a privatised service. Either one thing or the other. Either a completely privatised service without the subsidies so letting the market dictate the price of the tickets or a nationalised service. In a time when we are all supposed to be more aware of our carbon footprint and doing less driving in our cars, putting up the fares smacks of a severe lack of common sense.
The other question therefore that arises from the interest rate rise is why? We already have the highest rates in Europe, so much so that the tourists we were hoping for this summer can't come here,and why would they want to, with badly managed hotels, a n idea of customer service that stems not from some of the greats but from the charm school of a 1950's seaside landlady, with really bad weather and high prices as well.
The question that has been worrying me is where does the extra money go. It will cost me an extra 16 GBP on my mortgage each month but where does it go? Does it go to the Building society? Why should I pay them extra for something I have already negotiated. Does it go to the government, if so what do they do with it? The NHS or Education perhaps? If so then why are both in a state of neglect. Why do we have to pay extra for it. Surely with all the new economists coming out of universities across the globe someone must have worked out how to curb inflation by now. If its to curb borrowing then why isn't it just put on new borrowers not on the already established borrowers who already have their loans and mortgages. If its a choice of 2pence extra on a can of beans and 16 pounds every month on my house so putting me under stress and worry of the possibility of losing my house, then what do you think is going to be my answer. I can do without the beans.
This leads to another point, why do I have to pay an interest rate of double figures for a credit card when the bank rate is so low? Why should their be a variable rate according to status. This discriminates those who already have problems getting a loan because of their credit rating so making those in financial hardship worse off so actually subsidising the rich. Surely there should be a standard rate, and if there is concern about payback then a small insurence policy to cover the loan should cover that problem, so allowing the worse off to maybe invest in their own future instead of being hampered by a credit system that is the worst in Europe. Only now are we getting what the Europeans have had for years, 25 year fixed mortgages. No wonder the amount we owe is the largest in Europe.

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