No joy for rock-bottom savings returns

THERE is likely to be further hardship for Britain's savers. Not since the early 1950s have deposit accounts paid such low rates of interest.

Although the major building societies and banks are yet to decide whether to slash their savings rates further, investment advisers urged people wanting to set up or add to their accounts to do so quickly as cuts on fixed rate accounts are likely to be brought in within days.

But even before today's cut, the best deals, such as the Coventry Building Society's 4.2% deposit account, leave basic rate taxpayers barely beating the 2.9% rate of inflation. For some, savings are actually falling behind the cost of living.

Many of Britain's savers are in the most vulnerable bracket of society - the elderly and retired.

Annuity rates for pensioners will also probably fall because they too are set using the Bank of England cost of borrowing.

Meanwhile, the rate cut sent the pound falling against major currencies - bad news for holidaymakers with plans to visit either Europe or the US. Sterling fell more than a cent against the dollar, while against the euro it slipped more than half a penny.