IT was perhaps, on reflection, not the biggest revelation.
Speaking to journalists about how the coronavirus pandemic has been affecting Royal Bank of Scotland, chief executive Alison Rose said the institution had seen an increase in deposits from personal and business customers as the first quarter progressed, and lower spending on debit and credit cards.
Given the highly unusual circumstances in which we have been forced to live for the past six weeks, as a result of social distancing measures imposed to halt the spread of coronavirus, this is no big surprise.
The usual outlets for our disposable income, be it trips to the shops, bars, cinemas, restaurants or expenditure on holidays, have been closed off as the economy has largely been temporarily mothballed.
Business and personal banking customers have also been taking steps to conserve cash as worries persist over jobs, amid fears that we could be in for a deep and long-lasting depression – and not the V-shaped recession with a quick recovery that we have all been longing for.
Such patterns of behaviour are highly understandable, and are natural reactions to the circumstances.
READ MORE: Royal Bank profits hammered by £630m virus charge
Having had the chance to digest Ms Rose’s comments, it struck me that anyone looking to save money right now can expect to receive even less of a return on their hard-earned cash.
Obviously, this may not be the most pressing concern for many people who are worried for their livelihoods, especially amid fears of a big rise in unemployment after furlough payments from the government come to an end.
Reports from earlier this week suggested Chancellor of the Exchequer Rishi Sunak is looking to wind down the Coronavirus Job Retention Scheme, which has been so crucial to maintaining the incomes of millions throughout the lockdown, from July.
But the lower base rate will doubtless be in the minds of many who have saved long and hard over the course of their lives, and are perhaps nearing or are now in retirement.
Shortly before the lockdown came into force, rate setters at the Bank of England moved quickly to mitigate the pressure on the economy from coronavirus by slashing the base rate to 0.1 per cent, the lowest in the Bank’s 325-year history, in the middle of March.
The Bank had already cut the rate to 0.25% a week before as the risk of the pandemic began to become clear.
READ MORE: RBS chief calls for time to restore capital after Covid crisis
A rock-bottom base rate is helpful in some ways, of course, because it reduces the cost of borrowing. It is helpful for those with variable-rate mortgages, although the extent to which banks will pass the latest cut on to customers has still to become clear.
The flip side is that slashing the base rate to a historic low deals another severe blow to savers.
Rock-bottom rates is something depositors have had plenty of time to get used to.
Savers have been forced to stomach low interest rates on their deposits ever since the financial crisis of 2008 and 2009, when rates were slashed amid extraordinary moves to bolster the economy after banks had been brought to their knees.
In the last 10 years, the base rate has not been higher than 0.75 per cent, which it reached in August 2018. That rate was kept in place by setters until March of this year, when the coronavirus risk was crystallising.
By contrast, depositors would routinely have seen the rate hover between 5% and 6% for long periods during the 20 years prior to the financial crash.
During that spell, anyone with a few thousand pounds tucked away would have enjoyed healthy returns on their savings.
As an illustration, someone with savings of £40,000 could earn £2,400 a year on an interest rate of 6%, providing a welcome boost to income, and perhaps in turn spending in the real economy.
Those days are sadly long gone.
Even if someone has managed to save during the past decade of relentless austerity, when wage growth has lagged behind inflation, the base rate has not been 1% since February 2009. It has hardly been a boom time for depositors.
Now a grim situation has been made even worse by the Bank of England’s justifiable response to coronavirus.
High street banks wasted no time in cutting savers’ rates after the base rate was reduced to 0.1%.
Indeed, it was just three weeks after the latest cut when I received a letter from my own bank, informing me that the already paltry rate I was receiving would be reduced further still.
Analysis published by consumer watchdog Which? has pointed to declines in the annual equivalent rate (AER) on a host of savings products such as fixed-term cash ISAs (Individual Savings Accounts) and long-term fixed accounts.
It also found that the number of such accounts on offer declined between March and April.
There will be some who argue banks should be doing more to reward loyal savers. But the banks will naturally say that they have little choice. With the base rate having been so low for so long, the ability of banks to take a healthy margin on products such as mortgages has been hampered for many years now.
If their ability to make money on loans is constrained, how can they be persuaded to offer more generous terms to savers?
This would appear to be especially unlikely now, given the demands for support they are now facing from business customers who need extra funds to tide them over during the pandemic.
Banks have faced intense scrutiny over their appetite for supporting government initiatives such as the Coronavirus Business Interruption Loan Scheme (CBILS) and the small business bounce back loans.
Having dialled into various bank results calls in the past week, it is clear these efforts are occupying a huge amount of management time.
Those efforts are understandable, however the relentless squeeze persists for savers from low bank interest rates.
Frustration over the lack of return will be even more acutely felt by anyone who invests in products linked to the stock market, such as ISAs, given the extent to which the FTSE 100 has plummeted since the coronavirus outbreak.
Moreover, if you also rely on dividends from stock market listed firms to supplement your income, the chances are you will also have to kiss goodbye to those this year, such have been the extraordinary steps companies have had to take to conserve cash and ensure they can survive to the other side of the crisis.
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