Robert Powell reports from a festive protest against the Bank of England and looks at how to avoid falling into debt this Christmas...
“Mervyn, the red-nosed banker, had a very nasty cold. Said he could cut inflation, wish that we had all bought gold”
This is just one example of a Christmas carol given a very different twist by the Save Our Savers campaign in a protest outside the Bank of England earlier this week. The group was calling attention to the plight of savers in the current low interest, high inflation climate.
Save Our Savers
The campaign's key aim is to highlight the fact that the Bank of England's Monetary Policy Committee (MPC) are not even attempting to keep inflation within the 2% target set out by the Government. As a result, the group claims savers are losing out on £43 billion a year in interest payments.
The MPC’s decision to hold interest rates last week means that the Base Rate has now been at the historic low of 0.5% for 33 consecutive months.
But while many are critical of the current low interest climate, others are concerned that a rise in rates would hit mortgage borrowers and other debtors hard.
Simon Rose from Save Our Savers said that while the campaign realised that the Base Rate was unlikely to increase anytime soon, the Bank of England should still not be encouraging people to get into debt by keeping borrowing costs low.
Not so merry Christmas
The protest comes in the same week as the release of new research from insolvency experts R3 on UK debt levels. The survey shows that up to 3.5 million Britons could turn to payday loans over the next six months as the costs of Christmas start to bite.
This spending squeeze is in part caused by rising prices. The rate of Consumer Prices Index inflation fell back slightly to 5% in October but it's still hitting us hard when it comes to paying for everyday essentials such as food, fuel and energy.
Matt Hartley from the Consumer Credit Counselling Service said that the debt charity always sees an increase in people struggling with a New Year debt hangover.
“It’s really important to plan ahead and think about how you’re going to get through to January. Make a budget and do not take on more than you can afford,” he said.
More: 12 ways to avoid a hangover at Christmas | You’re not alone with debt this Christmas