AFTER the Bank of England cut its key interest rate on Thursday, I hope the committee patted one another on the back and had a jolly lunch afterwards, because whatever it may do for the banking crisis it will be all but irrelevant to most savers and borrowers.

Abbey, Bradford & Bingley and Leeds building society were among those that hoisted savings rates despite the well-signalled intent to cut Bank rate.

Countless lenders have raised their mortgage interest rates too.

In the process, many are beefing up profits by widening the gap between what they pay and what they charge. The commercial lending market has in effect ground to a standstill so the banks are pulling in money where they can – off you and me, mainly.

That means they couldn’t care less what the Bank of England gets up to as far as their high-street operations are concerned.

One result is that the question of whether to go for a fixed or variable-rate loan is now more than ever a matter of personal temperament, because it is becoming impossible to say which will be better financially.

All of which makes it even more of a missed opportunity that Sir James Crosby’s new mortgage finance working group has been told to examine only the market in mortgage-backed securities.

While these securities are important, having played a huge part in the current global shambles, I would have liked to have seen the able Crosby – former head of HBOS bank – painting on a much wider canvas to suggest how to make homebuying finance less of a jungle.

Meanwhile, those on the house-purchase ladder will have to cope with the evermore bewildering tactics of the banks.

Now that Abbey has withdrawn new 100% mortgages, that beast is probably off-limits until well into next year, to the chagrin of first-time buyers and the joy of buy-to-let landlords straining under the weight of falling house prices, rising interest rates and tenants finding it harder than ever to pay the bills.

This could have deep consequences. For the first time in 50 years, before the 1960s mortgage boom, a generation of underforties have had to think in terms of renting rather than taking out a mortgage.

For those on the borrowing treadmill, the latest three-card trick comes from HSBC, offering to take over rival lenders’ fixed-rate mortgages.

The snag is, it comes with more strings than a puppet troupe and ends on May 18 anyway.

By the way, your friendly local mortgage broker

probably won’t rush to help you beat that deadline, because it is only available via direct applications, so he or she won’t earn a penny. And those who most need to avoid a rate hike because they have a 90% or even 100% mortgage will still be hit, because HSBC isn’t interested in them.

Looming over this pantomime, like a snowball at the top of a hill, is the gathering fall in house prices.

Now that the Halifax national average has slid from £196,000 at the start of the year to £191,000 and surely has some way further to fall, it may be years before we see the average get so near to £200,000 again.

This will stop many people from selling, and the Bank of England’s real worry is that that this may slow the whole economy to lower than the 1.6% annual growth rate now predicted by the International Monetary Fund.

To quit or not

DO people want to keep working after retirement or don’t they? It’s hard to tell, after two contradictory surveys. The Department for Work and Pensions (DWP) says that nearly half of those aged 65-74 feel too young to stop working, while insurer Axa reckons that Brits fear longer working lives.

Both conclusions suit their respective sponsors. The DWP has a vested interest in encouraging us to keep on working after we retire from our main careers.

Many of us are not saving enough to collect a worthwhile pension, and one of the big long-term headaches for politicians is a growing army of aged voters pressing for bigger state pensions that can only come from taxing the workforce.

And Axa naturally wants us to save more, preferably via its pension products. According to Steve Folkard, Axa’s head of pensions and savings: “People still in work should be aware that having a happy and prosperous retirement costs money, so it’s vital they plan ahead.”

One of the best accounts of the ups and downs of retirement is Jack Nicholson’s 2002 film, About Schmidt: it shows the false bonhomie of the company farewell, the search for a role, adjusting to living 24/7 with a spouse previously seen only at evenings and weekends.

The plot gives Schmidt enough domestic headaches to drive most men to look for some sort of work. This sort of predicament is more likely to provide a motive than outright financial problems, although a growing number of Brits will retire with a mortgage still hanging over their heads.

It has taken a long time, but the pipe and carpet slippers notion of retirement is gradually being updated to reflect the fact that it is not a five-year trudge towards the grave but a 30-year spell that needs serious thought.

Round-the-world trips and perennial golf matches are fine, but not enough to occupy three decades.

I predict that inadequate savings will overlap with a greater willingness to offer old people undemanding jobs. So Axa and the DWP are both right: we’ll muddle through.