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Borrowers and savers 'both affected by crunch'

Savers can cash in on the financial crisis, a new study shows.

Big banks have become much less willing to lend to each other in recent months, leaving many with severe worries about cash flow.

Therefore, many banks are encouraging people to save with them in order to generate revenue - and are using higher rates as bait.

Even two cuts to the base rate of interest from the Bank of England have not prevented the best savings rates from increasing in recent months, Moneysupermarket.com has found.

However, the cash flow crisis in banks has also led to a scaling-back of loans lending and a corresponding rate rise - bad news for many consumers.

The best loans rate has gone from 6.56 per cent last September to 7.34 per cent now.

Tim Moss, head of loans at the price comparison site, said: "Lenders are ramping up their rates to claw back profits.

"For every happy saver in Britain, there is a now a disappointed borrower."

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