Interest Rates Any Good News For Savers?

[gordiescotland1]

With the interest rates rising really high with the announcement from the Bank Of England, I know it's going to be a tough couple of years for Britain. Is there any good news for example for savers. I have a few savings accounts with pathetic rates of interest I sometimes wonder why I bother ! Do you think that there will be any chance that building societies will increase interest rates?

[goodgoalie]

Bailey is a havering buffoon, promoted way beyond his abilities.

[gordiescotland1]

Aren't most of them? Carney was just as bad !

[Canary42]

IMHO you're better off with a selection of gilt-edged shares, through an execution-only broker to keep the charges down.

[bobbinwales]

Theres plenty at around 1.75% and some at 2.75% for one year fix's, and these will increase by maybe 0.25% or a bit more...but unless you got £20000+ saved its hardly going to be noticable ... but what you will see is that when prices are going up by 9% a year you money is losing alot whathever savings account you choosed

[jno]

ah, I'm remembering the good old days of 20% pay rises, talk about a feelgood factor!

[bobbinwales]

geordie a have look see here. I think they been updated today.
https://www.raisin.co.uk/savings-accounts/
The martin lewis site is good too.... but not sure if its been updated today https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/yet after the base rise

[bobbinwales]

//ah, I'm remembering the good old days of 20% pay rises, talk about a feelgood factor!//
Well yes and no. The problem is we were allways trying to catch up... prices went up week by week but we had to wait until after a year of inflation before we could ask for and hopefully get a whopping pay rise.

[jno]

the satisfaction of realising I'd laboured my way up to a five-figure salary was worth a few corporate bankruptcies

[bobbinwales]

my martin lewis link is here
https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/

[Canary42]

When I started work on £5 a week my ambition was to reach £20 by the time I was 30 (i.e., the magic £1,000 pa). Little did I know about the approaching inflation.

[roadman]

I have a natwest savers with 3.3% interest on it i got it very recently might be worth having a look

[roadman]

martin lewis best money saving tip is get paid by ITV

[bobbinwales]

Yes thats not too bad roadman-- but if its the one I'm thinking off that rate only applies to the first £1000 )so thats £33 a year) then it drops t0 0.3% on the rest!

[Hopkirk]

Interest rates are still so pathetic for savers that you are best lumping it into premium bonds.
The worst you can get is nil, not much less than you get in a savings account.

[New Judge]

My schoolboy economics tells me this is the wrong strategy.

Raising interest rates is a good tool when "normal" inflation (i.e. too much money chasing too few goods) is evident. It takes money from consumers, tempering demand, and easing price increases.

This is not normal inflation. It has been principally caused by high energy costs (both domestic and industry) and high fuel costs (with a bit of supply chain probems thrown in) . These feed through to prices for all consumer goods. The problem is, people have not got "too much money" as they have when traditional inflation is evident. The sharp rises in fuel and (particularly) energy costs has left many people struggling. All that will happen now is what money they have got will go on increased fuel and energy costs, their discretionary spending will have to reduce as a result and recession will be the end product. Raising interest rates, in these circumstances, will do nothing to quell inflation as energy and fuel consumption is not something that individuals and industries can readily reduce. The answer to the problem lays way back in the past when successive governments began contracting out the nation's energy supplies when they had perfectly good sources at home. It won't be cured by increasing interest rates by half a point.

[davebro]

They said their aim is to bring inflation down to the target 2%.

I won't hold my breath!

[bobbinwales]

Not everyones in the same boat though newjudge...lots of people are struggling and will alot more in the winter but there are people with lots of spare cash- some resetraunts are packed, the roads are crammed, people are going on holidays abroad, car prices and house prices are shooting up but the demand is still there... so its these people who now may have to think twice about whether to keep splashing there cash or save some money now interest rates are higher or weather to pospone the idea of taking on a big morgage.
I dont know whats best but I dont think its as simple as saying the 'expert's are all wrong.

[Hopkirk]

In the unlikely event that energy costs come down dramatically, will we get deflation?

[jno]

good point, bobb, the poor may be getting poorer but there's a couple of years' worth of unspent savings that have piled up over Covid that distorts what's normal or not.