Sir, In one leap, the Bank of England’s anti-inflation credentials and its independence have been compromised by lowering interest rates. The proper response to lower consumer demand is surely for the Government to lower taxes and let people spend their own money, instead of giving succour to irresponsible consumer borrowers who, together with irresponsible banks, are part of the problem; but of course, the Government cannot lower taxes because it is overborrowed. What kind of message does this send out to prudent savers, from a Government that will now surely inflate itself and debt-burdened consumers out of their problems? When push comes to shove, Bank of England independence has now proved to be a total sham.

Charles Bieber

London N12

Sir, Your analysis and call for the Bank of England to cut interest rates by a full percentage point was correct (Leading article, “Banking on confidence”, Oct 8). The Bank of England’s only concern appears to have been to hold down inflation by any means to the exclusion of all other concerns. The issue is to survive the onslaught. The slump will bring inflation down.

G. Viney

Billericay, Essex

Sir, Central bankers, presumably under the order of politicians, seem to be following an out-of-date and simplistic flowchart that states that if times are tough then you should cut interest rates. This is an act of absolute folly. First, it was low interest rates that got us into this mess. Secondly, lower interest rates will have no effect on growth since the main problem is the availability of credit, not the cost of credit.

Most dangerous, however, is that by ignoring inflation, the Bank of England is punishing the very people who offer the only hope we have of avoiding a depression — savers. At best they will hoard their savings, at worst they will pull them out of the banking system.

Martin Wright

London SW6

Sir, Why is it down to the UK taxpayer to cover for the greed of Icesave savers (“Savers in limbo as Icesave freezes cash”, Oct 8)? Had the reported £4.5 billion amount remained in proper UK banks, liquidity would have been enhanced. Their recklessness has hit the UK taxpayer twice over.

Howard Rosen

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