Italy political crisis threatens Eurozone turmoil

US faces government shutdown

LONDON -- Global markets have fallen into the red as a US government shutdown looms and a fresh political crisis in Italy threatens more Eurozone turmoil.

 Republicans and Democrats in Washington remain at an impasse over the budget, meaning many government staff will be put on unpaid leave and services slashed from midnight in the US. The warring politicians have also made no progress on raising the debt limit by the October 17 deadline which could spark a potentially disastrous debt default by the world's biggest economy.

 British Savings Week has just ended but even if there were 52 savings weeks in a year it would not disguise the fact that it is a miserable time for savers.

 It is death by a thousand cuts, literally, with 1,000 interest cuts applied to savings rates so far this year even though the bank base rate has not budged for four years. The Government’s Funding for Lending Scheme and money printing policy may be making every week a mortgage borrowing week for those enjoying cheap home loans, but savers outnumber borrowers by six to one and their plight should not be overlooked.

 Pity especially those pension savers faced with the prospect of a measly return when they convert their fund into a retirement income using an annuity. Rates have been declining and savers have to salt away extra to make up the shortfall. For those relying on deposit accounts to meet that goal and for those depending on savings interest to boost their incomes now these are desperate times. The average easy access rate is just 0.55 per cent gross. What is worse is that even when a saver believes they have bagged a decent deal, banks and building societies are ready to hoodwink them and pay less than first appears.

 Most of us are wising up to the teaser rate ruse, where you are lured into an account by attractive rate, only to find that after a short period the rate drops like a stone. These are falling out of favour with savings providers, thankfully, but they are lining up new wheezes. Restricted access is one such device on so-called easy access accounts. Savers wanting to get at their cash often will see the initial rate do a disappearing act. Ironically, some of the best savings rates you can find are on current accounts with some current accounts pay almost three times as much interest as standard savings accounts