Where is the bottomless pit in the banking system?

Is it me, or is the banking system extracting the urine out of the society that bailed it out only four years hence? It is absolutely no wonder that millions of Britons are, either by choice or through hardship, turning to short term loans to steer clear of the High Street lenders. On top of releasing figures on how profitable they have become, through credit card interest rates improvement and higher overdraft fees, they are now pushing the base rate of lending up to 4%, when the Bank of England base rate remains unchanged.

The fact that the government are allowing this to happen is simply underlining the fact that they are allowing changes in society to happen that are grinding the very soul out of the working class family. If it wasn’t for short term loans, many may have gone under long before now.

Details in one recent report suggest that the quarter of one percent rise, from 3.75% to 4% imposed by the RBS-Natwest group, will see homeowners with £100,000 outstanding on their mortgage have to find almost a further £300 per annum to accommodate this increase. Halifax, not wanting to miss out, have added nearly a half of one percent (0.49%). This rise alone equates to almost the entire figure that the Bank of England are holding their base rate at, 0.5%. So where is the justification?

The combined rises will hit over one million households in the UK, 200,000 from the RBS-Natwest loan book and a massive 850,000 Halifax customers will feel the effect, tantamount to simple profiteering, according to the report.

As families turn more often to short term loans to stave off the effect of the pace of inflation – although falling, still outpacing real income – the very real concern is that home owners with substantial amounts owing on their mortgage will fall further into debt. For those who drive, this additional strain on the household budget will come as a real kick in the teeth – many more and we’ll soon all be wearing dentures.

The rise in petrol is, however, threatening the trend of decreasing inflation and the £375bn of ‘quantitative easing’ that the Bank of England has flooded the system with is not seeing its way through to those who really need it. That massive figure equates to roughly £5,000 per head in the UK – a huge sum that people will start to ask, soon enough, where has all that money gone? Who has been £5,000 better off in the last three years, since the cash-flow was introduced. Perhaps if those payouts had been directly to individuals, instead of invisibly introduced into a banking system that still owes the taxpayer billions, there would not be the consternation in government ranks and banks crying on authority’s shoulders, whining about how many UK citizens are turning to online short term loans. When banks won’t lend the money they have been given, what other choice do hard-up working- and middle-class families have, other than to turn to online lenders?

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