Interest Rates And Inflation

The bank of england is expected to cut interest rates to half of one percent today and at the same time print more money to ease perceived money supply problems caused by commercial banks unwillingness to lend money that they have. A rather simplified view I grant you.

For anyone saving money in a bank (low risk investment product?) account this is a complete disaster. Firstly they are losing money because interest rates are well below the rate of inflation. Secondly, with more money in circulation the value of existing money is going to drop (more inflation).

I'm no financial expert but this looks a very desperate solution if at all it can be called that. The parallel in gambling terms is like betting every favourite at sp prices. Over the long term the bank will be eroded.

Thank the universe for medium/long shots and enhanced odds. I say stick yer headphones on and tune out.