Economic downturn and the increase of inflation had affected both financial companies and savers in UK drastically that people suffer with depreciation in their spending power.

Government of UK is in under new pressure as the rate of inflation is increasing and the financial companies are not in a position to pay high interest rates.

Many savings banks pay less than 3.7% of interest in saving accounts. This has kept the customers away from savings in the banks. Therefore the banks have to look for higher income services like loans, mortgages to get some sort of increase in their profits.

As the savings rates are linked to the demand in the marketplace, remaining to 0.5% of UK base rate the government is trying to lend a hand to the savers. Higher interest rates will be able to attract the savers back to UK financial companies and Banks; but it is doubtful in the present financial crisis!