When can savers expect base rates to rise?
Even though we have seen an increase, at least in the short term, in savings rates in the UK it is unlikely we will see any further significant rises until UK base rates start to increase. However, UK savers will be dismayed to learn that the Bank of England fully expects UK base rates to remain at 0.5% for the foreseeable future as the fight against inflation and the ongoing attempt to refloat the UK economy continues.
As ever, it seems as though UK savers are literally at the bottom of the pile and last on the list of those in need of help from the UK government. The last couple of months had seen a significant spike in the UK savings rates as many UK banks looked to attract as much money as possible. It seems as though UK money market are still very difficult and suffering from a lack of liquidity, although unfortunately this spike in interest rates did not last too long!
When you consider that headline inflation is 1.6% in the UK and the UK base rate is 0.5%, with many savings rates at or around this level, a number of uncompetitive savings accounts will actually see funds reducing in real terms because of the higher rate of inflation.
Share this..
Related stories
Pensions suffer again, as Annuities continue to fall
Pension annuity rates, the amount you are paid as a regular income once you retire, have fallen again, in the biggest drop since 2002. This is according to a report by Moneyfacts, who have revealed that so far this year the average income generated by an annuity for a 65 year old male has fallen by 8.6pc. The report also found that, unless annuity rates can stage a miraculous turnaround in the...
Read MoreUK car scrappage scheme comes under fire
In what could be a body blow for the UK government it has been revealed that the U.K.'s largest car dealership, Pendragon, has dismissed the scrappage scheme as "irrelevant". It is interesting to see that despite initial indications of a £5000 offset towards a new car, the figure has fallen to around £1000 for the vast majority of cars to be scrapped in the UK. However, even this may be too much...
Read MoreAre UK energy prices set to fall?
Despite recent attempts to decouple the UK energy market from the oil sector there is now growing pressure on UK energy providers to reduce costs. After a report from the International Energy Agency today we saw a significant reduction in the price of oil which is now around $50 a barrel. The report suggested that oil consumption in 2009 could fall by as much as 2.4 million barrels a day, heaping...
Read MoreBudget Headlines : Pension tax relief to be cut for those on over £150,000
Pension tax relief to be cut for those on over £150,000...
Read MoreEU regulations to hit hedge funds
A raft of EU regulations which are set to become law could lead to compliance costs of around £1.2 billion for hedge funds in the first year. It is thought this could fall to around £1 billion the year for the industry in every subsequent year as the regulator gets tough with hedge funds, which many believe were one of the elements behind the collapse in the worldwide money markets.
Read More