“In the UK interest rate cuts since the start of the crisis have delivered the average £103,000 floating rate mortgage holder an annual saving of £4,635.Against that the government estimates the net cost of bailing out the financial system at £10bn or £400 per household.” Lex in the Financial Times today.
There are 26m households in the UK.
But only 11.1m of households have a mortgage and of those, only 55%, or 6 million, are on variable rates.
In other words 100% of households paid £400, but only 23% received savings of £4,635.
Plus all households shared (via pension and other indirect and direct holdings), in the loss of £5bn of dividend income from Royal Bank of Scotland (£3bn dividends in 2007, nil in 2009) and Lloyds (£2bn dividends in 2007, nil in 2009) = £192 per household.
All households via pension other indirect and direct holdings, shared in the loss of billions of market value of the UK quoted bank sector. The £30bn loss of market value of Royal Bank of Scotland alone amounted to £1,150 for every household.
So without really trying I am already up to £1,742 for every household.
Is Lex spinning or being economical with the truth?
Who gains from the gross misrepresentation of the facts?
Follow the money?
Lex, care to calculate what the total reduction in the value of UK bank shares was, divided by households? Who do you think bore that cost? Maybe you need new batteries for your calculator?
Bun rating – Zero, too much smoke and too many mirrors to see if there is a pattie