Interest rate cuts will starve banks of cash

Yesterday’s interest rate cut to its lowest level on record will deter savers from depositing money and further undermine the economy, some analysts are arguing. As two-thirds of savings accounts will now pay less than 1 per cent interest, banks will be denied the flow of deposits needed to fund fresh lending. The decision to cut rates again also drew criticism from pensioner groups, as millions of older people rely on income from savings.