One-sided economics: Why I love the Daily Mail

From The Daily Mail:

Banks came under fire last night for using the first interest rate hike in a decade to hammer borrowers but do nothing for long-suffering savers. The Bank of England yesterday raised rates from 0.25 per cent to 0.5 per cent – adding £180 a year to repayments on a typical variable mortgage...

Yesterday’s rate hike – the first since July 2007 – triggered an immediate increase in bills for 1.4 million families with tracker mortgages. A further 2.3 million households on other variable rate mortgages are likely to see their monthly bills increase in the coming days as lenders pass on the central bank’s rate rise.

But there is no guarantee Britain’s army of savers will benefit from higher returns on their nest eggs after a dismal decade of pain since the financial crisis.

Last night banks were accused of using the rate hike to boost their profits – with one analyst predicting a £500 million windfall. They are now under huge pressure to pass on the rate rise to hard-pressed savers, with the Prime Minister and Mr Carney leading the calls for action.

I don't know if it was deliberate, but the url suggests that the original article title was "Banks under fire for hammering borrowers not savers".

This is one-sided economics at its finest:

a. While they cheerfully admit right at the start that non-fixed rate mortgage payments will go up by £15 a month, they then blithely refer to borrowers as being "hammered". £15 a month is not being hammered, it's a minor irritation.

b. On Planet Mail, there is no distinction between mortgage borrowing and cash saving despite those clearly being diametrical opposites. This is typical Home-Owner-Ist thinking, which is embedded in government thinking as well, which is why many governments subsidise/give tax breaks for cash savings as well as mortgage debt. The result being that in many countries, it doesn't make sense to pay off your mortgage early, it's better to have a bigger mortgage and more cash savings, which is all good news as far as the banks are concerned.

c. On Planet Mail, both mortgage borrowers and cash savers are always "hard pressed". Their painted clock is right this time ("a painted clock is right once a day" as Diane tweeted recently), in that the system really has taken the piss out of cash savers for the past ten years, but the Mail is blind to the fact that most mortgage borrowers have been given corresponding massive windfall gains over the past ten years.