Interest rates - forecasting a storm?

BBC Radio 4's Money Box Saturday, 8 November at 1204 BST On Radio 4 and Online Programme transcript (15 pages) 08 November 2008

The Bank of England has made a surprise one-and-a-half percentage point cut in UK interest rates to 3%.

This takes rates to their lowest since 1955 and the cut is the most dramatic since 1981.

The rates decision was made to try to boost the economy, which appears to be heading into a recession.

We got the latest analysis from Ralph Silva, banking analyst at the Tower Group.

He also spoke to us about the new potential offer for Halifax/Bank of Scotland from two former chief executives of Bank of Scotland and Royal Bank of Scotland who said HBOS would be better off independent than taken over by Lloyds TSB.

Interest rates - forecasting a storm?

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How will the Bank rate change affect the cost of new home loans?

So what does the Bank of England interest rate cut mean for mortgage holders?

There is pressure on lenders to cut their rates.

Of course, if you have a fixed rate deal you will not benefit at all.

But what are the prospects for those on discounted or tracker deals, and what about new borrowers?

Ralph Silva, Ray Boulger, of mortgage brokers John Charcol and Adrian Coles, director general of the Building Societies Association, shared their views.

Mortgages

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The banking crisis has brought the safety of savings into sharp focus

The cut in interest rates is potentially bad news for savers.

Normally the reduction would mean depositors would see less of a return.

But banks and building societies really need our cash to repair their balance sheets.

So will savings rates come down at all and if so, by how much?

Bob Howard reported and Ralph Silva and Adrian Coles gave us their take.

Savings

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An end to self-regulation by banks and building societies?

The City watchdog, the Financial Services Authority, says it plans to regulate the way banks, building societies and credit unions treat customers.

At present, the banks regulate themselves through the Banking Code Standards Board (BCSB).

This sets down guidelines for the way current and savings accounts are marketed and operated, and tells banks what information they should give to customers about changes to accounts.

David Lipsey, chairman of the Financial Services Consumer Panel, has welcomed the development.

He joined us to explore the issue.

Banking regulation

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John Whiting talks to us about financial turbulence and IHT

One implication of the credit crunch is the fall in value of shares and property.

This could mean lower inheritance tax (IHT) bills.

But what happens when probate is still being obtained and the price of such assets is now well below what it was when they were first assessed?

John Whiting, tax partner at the accountancy firm PricewaterhouseCoopers, advised on what practical steps could be taken.

Inheritance tax

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Some may have to wait nearly five more weeks before getting cash back

UK customers of the insolvent Icesave internet bank should have received an e-mail this week from the Financial Services Compensation Scheme (FSCS), explaining the process of how to claim their money back.

Refunds will be triggered in batches in the next three to four weeks, with the cash arriving five days later.

The bank, owned by Landsbanki, closed in early October, leaving 230,000 customers without access to their cash.

If you are an Icesave customer and have not received the e-mail from the Financial Services Compensation Scheme, telling you how to claim your money, you can call the helpline: 0845 7300 131.

We looked at the most recent developments.

Icesave

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BBC Radio 4's Money Box was broadcast on Saturday, 8 November 2008 at 1204 GMT.

The programme was repeated on Sunday 9 November 2008 at 2102 GMT.

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