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Featured - ISA allowance
What is the 2024/25 ISA allowance?A new tax-year means a refreshed ISA allowance to allocate. Find out more about the 2024/25 ISA allowance...
Savings
ISAs
Mortgages
Buy to let
Specialist mortgages
Featured - Debt and your credit score
How debt impacts your credit scoreA healthy credit score has its benefits, so make sure you manage your debt correctly.
Loans
Featured - travel insurance
Travel insurance 2024Discover the best travel insurance policy for your next trip.
Home & vehicle
Health & travel
Featured - High interest current accounts
Find current accounts offering in-credit interest rates up to 5.00% AER.
Current accounts
Featured - Purchase Cards
Best purchase credit cardsExplore the best cards with a 0% introductory period.
Credit cards
Credit repair
Calculators & guides
Featured - The triple lock explained
Could the value of your state pension rise by more than inflation?
Retirement
Business savings
Business products
Business insurance
How much can I give as a cash gift?
How much can I give as a cash gift?Will your loved one's gift be tax affected?
Categories
Featured guides
Popular news
Latest news - by category
Other money & finance news
Featured Star Ratings categories
Other Star Ratings categories
Inflation during September fell slightly to 3.1%, down from 3.2% in August, but with inflation still above the Bank of England’s target of 2.0% the possibility of a base rate rise happening this year remains.
Today’s Consumer Prices Index, which is what inflation is measured by, does not consider the recent fuel crisis and energy price hike, meaning it is likely that inflation will continue to rise in the coming months. To help control rising inflation the Bank of England may decide to increase base rate, which currently stands at a historic low of 0.1%, before the end of this year, with some finance experts suggesting that the Bank of England could increase base rate as early as next month.
Laith Khalaf, head of investment analysis at AJ Bell, suggests that today’s inflation figures may cause the Bank of England to delay increasing base rate. Khalaf said: “The result is the market is now pencilling in an interest rate rise in November, though seeing as only a month ago the Bank’s interest rate committee voted unanimously to keep rates on hold, it could take a bit longer for the requisite number of doves to sheepishly convert into hawks. This latest moderation in inflation will also pour cold water on the case for immediately tighter monetary policy.”
For savers, today’s inflation figures means that still no savings account can match or beat the current rate of inflation, with the top paying savings account paying 2.05% AER on a five year fixed term. This means that savers who deposit money into a savings account will see inflation erode the value of their savings in real time.
If the Bank of England does decide to increase base rate, this could result in savings rates also rising. Rachel Springall, finance expert at Moneyfactscompare.co.uk, urges caution for savers who are relying on an increase in base rate to result in a significant rise in savings rates. She said: “Should the murmurings of a base rate rise before the year-end come to fruition, variable rate deals would typically be the first type of savings accounts to see improvements. However, there is no guarantee for rates to do so immediately and this could even take a few months to flow through, or indeed may not even be passed on in full. Savers sitting on the fence about whether to switch now or wait would be wise to keep in mind there is no certainty that interest rates on savings accounts will rise sharply leading into 2022. Indeed, for many, it was hard to imagine that interest rates could even drop to record lows this year.”
This means long-term savers may have to make a difficult decision whether to put their money into a cash savings account or choose to invest instead. Although investing is a risker option, as returns are not guaranteed and investors risk losing all their money, it can result in higher returns than those that can be gained on cash savings accounts.
Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time. Links to third parties on this page are paid for by the third party. You can find out more about the individual products by visiting their site. Moneyfactscompare.co.uk will receive a small payment if you use their services after you click through to their site. All information is subject to change without notice. Please check all terms before making any decisions. This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.
The Financial Conduct Authority is set to extend Consumer Duty rules to closed products and services from the end of this month, but savers shouldn’t be complacent.
The FCA is set to extend Consumer Duty rules to closed products and services from the end of this month, but savers shouldn’t be complacent.
Are the new rules enough to attract high quality companies to the UK?
Are the new rules enough to attract high quality companies to the UK?
With the UK General Election taking place later this week (Thursday 4 July), we examine how some of the main parties’ policies could affect your personal finances if they were to form the next Government.
Find out what the Conservative and Labour Parties have planned for your taxes, savings and pensions.
The Financial Conduct Authority is set to extend Consumer Duty rules to closed products and services from the end of this month, but savers shouldn’t be complacent.
The FCA is set to extend Consumer Duty rules to closed products and services from the end of this month, but savers shouldn’t be complacent.
Are the new rules enough to attract high quality companies to the UK?
Are the new rules enough to attract high quality companies to the UK?
With the UK General Election taking place later this week (Thursday 4 July), we examine how some of the main parties’ policies could affect your personal finances if they were to form the next Government.
Find out what the Conservative and Labour Parties have planned for your taxes, savings and pensions.
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Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.
Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.
Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.
Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.
Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.