Mr Bean

Michael

"spend now and interest rates will improve". Total rubbish for individuals of course since once the capital's gone, it's gone. But then Keynsian economists never liked savers.

lescam

Personally I haven't the slightest intention of spending my savings just to bail out the economy trashed by Brown. They will stay where they are even though they are earning next to nothing. Eventually rates will have to rise, and in any case I can think of nothing more stupid than to rush out and spend, spend, spend, in order to avoid my savings losing value. Let them lose value. One day all this will seem like a bad dream and we will enter the broad, sunlit uplands, to quote Churchill.

Sir Graphus

The bank ought to understand economics a bit better; running up debt in order to finance consumer spending of largely foreign goods may make GDP superficially good, but it doesn't mean the economy is sound. I truly hope the Bank isn't that shortsighted.

High GDP and high balance of payments deficit just mean a high rate of the transfer abroad of our real wealth.

Call me an 80s throwback if you will, but the balance of payments used to be a figure that made the news once a month. It used to be considered important. Economists and the media have stopped talking about it, probaby because it's too depressing. But I sure it's still as important as it ever was.

The Bank should stop talking about setting rates to stimulate consumer spending, but about setting rates to stimulate industry and turn the balance of payments black again.

Augustus

To those with a nest-egg I would say, in a world of low interest rates the income on offer from large, well-managed blue chip companies stands out as remarkable. So, no need to wait for 'jam tomorrow' because much equity income offers 4-7%. (But seek advice first)

Kennybhoy

Gold.

oldtimer

You would be better off investing in emerging markets or blue chips with a decent dividend yield - or investment trusts/OEICs that specialise in these things. The first place to do so is through as ISA - max c£10000 pa.

Anyone relying on savings for their retirement would be extremely foolish to follow Mr Bean`s advice. His remarks merely confirm what many have long suspected/known - it is the savers who get screwed every time, from Brown`s despicable raid on, and destruction of, their pension funds to the present regime of low interest rates and inflation boosting programme of Quantitative Easing (£200 billion and probably still counting).

Rhoda Klapp

So savers are looking to get more interest, yet those who wish to borrow find moneyt hard to come by and rates punitive?

If only there were some kind of institution which could put the two together to mutual benefit.

AG

People who save are not the same as people who spend however rich or poor they are. There is a different mindset and it's not the savers fault that everyone else has run out of money but the politicians fault. The politicians set the framework for the bankers to operate in and the politicians let everyone max out on mortgage debt to feed the illusion of unlimited wealth and boom and the politicians who were careful about destroying the wealth of pensions so that this money was redirected into property and consumerism. Anyone with savings is someone who has a healthy scepticism for politicians and know that they serve their own first. There are many old frail people living off their meagre capital and to tell them to go out and spend is tantamount to cruelty. Are the bank so stupid that they think higher interest rates will reduce spending rather than the other way round? Ask any woman if she'll be more likely to treat herself to some new shoes if interest rates on her savings are high rather than low and I think that all of us here would know the answer. Our lot are the same because the raid on pensions with change in inflation indexation has killed my spending overnight. Male economists just don't get the psychological bit.

denis cooper

There are indeed such institutions, Rhoda.

But many of them lent too much too carelessly, and now they must milk both savers and borrowers to rebuild their reserves, while others who'd conducted their own business more cautiously have been expected to save some of those who'd got themselves into trouble, and on top of that pay in more to compensation schemes.

JR

Erm. More wonderful economics analysis from the Spectator. Does your editor know you write this sort of stuff? It isn't a case of left/right or deficit hawk/Ed Balls - Bean is simply stating the obvious and explaining it in terms people can understand! Loose monetary policy is the only thing keeping the western world afloat at the minute and as the IMF said yesterday there is no prospect of it tightening (increased interest rates) in the near future. Redwood is an idiot.

Sir Graphus - I can't understand your last paragraph. That is exactly what the Bank is doing?! Low interest rates and QE help depreciate the currency and stimulate exports and (in theory) raise the price of imports improving the balance of trade. What are you suggesting - raising interest rates to deflate/crash the economy (by a whole heap of mechanisms) so consumers disproportionately reduce imports thus turning the trade balance positive?????????

Lescam - that's fine and all power to you. However if everyone followed the same thought pattern the economy would die a slow painful death. Hording by individuals and companies is the death nail of capitalist economies and policy makers need to do everything they can to avoid it.

One final point it would be lovely if there was an easy way to raise private sector investment. The figures seem to be showing companies are hording cash in the same way as individuals are saving rather than spending. If that continues to be the case no amount of spending cuts will close significantly the Government deficit.

libertarian

Well the supine and spineless quangocrats at the BoE have made yet another faux pas on behalf of our economically ( real world, not theory) illiterate politicians.

I have invested my savings in business start ups overseas. Thereby creating jobs, new products and wealth in another (non EU) country and earning a decent return myself. I would willingly have done that here but ALL of our political parties couldn't care less about real local investment. Tax and spend, spend and tax, borrow, borrow and spend is their only strategy.

alexsandr

Rhoda Klapp

Look at zopa. it is peer to peer lending.

there is also yes-secure

Google 'peer to peer lending'

Commentator

Bean, a member of the "independent" MPC is simply doing the bidding of his political masters in the LibLabCon. They want him to stoke up inflation so that the value of private and public debt is eroded. As someone wrote this morning, Bean's comments are the pound's Ratner moment. Savers are being shafted, even though UK levels of saving are totally inadequate for an ageing population. The BOE policy is even more essential because public debt is not being reduced: under the Coalitions' plans, it is increasing but at a slightly slower pace. Without debauching the currency, it cannot be repaid.

Jez

"Savers, Mr Bean sensitively put it, cannot expect to live off their nest-eggs when times are bad."

Blood beginning to boil....

But we do expect our banking system to have all the positive atributes that makes a rotting peice of dogshit on a warm day so unpleasant.

In a more tactful way of putting it;

Go F*ck yourself Mr Bean.

Sir Graphus

It's bad enough having the public sector appropriating however much of our money they see fit in taxes, to spend in ways they believe they know best. Now they wish to tell us what we ought to do with the portion they generously allow us to keep.

I think Jez put that more succinctly in his last sentence.

Cogito Ergosum

I will start spending when I start getting a decent return on my savings. Or, to put it slightly differently, when so-called Quantitative Easing becomes Cogito Easing.

Mirtha Tidville

I started to get very angry about this but then realised exactly who said it......It was of course MR BEAN....

BalhamBugle

Always assuming when non-economist discuss economics; it's like journalists discussing morality.

Economic growth depends on increases in consumption, investment, government spending or net exports. Now, your recommendation is that we should consume less, while the government spends less (I guess that the Speccie also sees that as a good thing). Business investment is currently falling and businesses show no inclination to start investing (at the rock bottom interest rates that Charlie Bean is supporting). And it will be a brave business which invests just as consumers and government stop buying. There is obviously exports, but these are still disappointing after the huge devaluation seen since 2007. Of course, much of our export markets are also in a crisis and show no inclination to increase their spending. So tell me, where's growth going to come from?

Or put it another way, where are the banks going to invest the extra savings from people to make the money to pay the higher interest rates that your other commentators are advocating?

Marcher Baron

I'll spend my savings when I have to on things I need (not want); I won't p*ss them up the wall as the last, unlamented government did taxpayers' money for 11 years. Only now, thanks to Mr Bean, I'll be putting off buying anything as long as I possibly can, just to be bloody-minded! It's bad enough that I'm losing value through inflation and lack of interest without being encouraged to squander money I'll need as a safety net.

Ian Walker

Lots of bravado from the savers here.

Of course, this is the "carrot" version. The stick will be letting interest rates get high......

Ian Walker

(erm, inflation rates, natch)

Don't post ill-informed crap opinion while drinking, kids!

Jez

Really Ian.....

lend us a fiver then mate. I'm skint.

Bexleyite

The only way that I can see to minimise my loss from my savings, given the current interest rate and inflation rate, is simply not to spend them.

Jez

I've about 30 seconds to write this as it 'bed time' for the kids.... but i feel i must throw it in;

Just where do the mugs that have caused this fiasco actually get off?

I mean ( and i know you're not the cuprit in any way shape or form) this sort of statement type;

"Lots of bravado from the savers here."

"Don't post ill-informed crap opinion while drinking, kids!"

"Economic growth depends on increases in consumption, investment, government spending or net exports."

We know the basics of economic theory guys.... we also know how to tie our own shoe laces, take ourselves to 'Jon' unaided and can probably look after our own finances quite sufficiently.

But this is the point;

You are inticed to save with a bank to boost your finances through interest so that same bank can play with your money, combined with other people's money to boost their overall portfollio... thus to make more money.

The same banks (lets not even go there with the 'good cop, 'bad cop' CBI etc) have utterly and shamefully brought it upon themselves to invent ludicrous systems to generate invisible money out of NOTHING.

And failed absolutely & catastrophically.

So alas, i must conclude;

Dear Mr Bean,

Go F*ck yourself good and proper.

oldtimer

If you worry about present and future inflation - and if you do not then you should worry - the sensible thing to do is invest in businesses which earn most of their sales and profits outside the UK and the USA. It probably will make more sense if those businessess are based outside the UK in tax friendly environments. Expect to see more UK based companies to relocate their HQs abroad. The critical moment will be the next budget and the tax changes announced then - or not announced as the case may be.

Victor Southern

Is there a pejorative that rhymes with banker?

Should we have Mr. Bean as second in charge of our state money laundering institution?

Why do our universities turn out so many idiots?

Percy

Is this all that Bean and King have got left in the locker, asking savers to blow their cash. It really is pretty pathetic.

Dimoto

Jez{
... as usual, the bods on here posing as learned economists and trying to teach their coffee-house colleagues how to suck eggs, are the bods with big debts and large mortgages, leveraged up to the hilt, who would have gone under without the Bank's negative interest rate policy. They are desperate for the shennanigans to continue.

Same applies to the like minded journos.

JohnAnt

At least Bean's remark forced me to go out and blow some of my hard-earned savings on a large bottle of vintage malt whisky to help restore my equilibrium. So I have single-handedly saved the economy today.
Cheers!

Fergus Pickring

I hope Mr extremely rich Bean has just kissed goodbye to promotion. Of course he doesn't need savings since he has a stupendous pension paid for by... well, by us. I think he should be hanged.