Inflation and a Potential Bank of England Rate Cut

by Insignis Cash Solutions in Industry Perspective

The Bank of England is increasingly expected to lower the base rate by 0.25% to 0.50% with the markets currently pricing in a 50% chance of a rate cut at the end of this week.

Inflation has declined further and currently stands at 1.3%.  While this mitigates the damage done to savings earning less than this level, we still work on the basis of a long-term inflation assumption of 2%.

Banks tend to react to the rate change reasonably quickly. As well as the speculation surrounding the decision, we have seen a handful of rate adjustments by banks in the run up to the decision.

Savings and deposit rates are not only correlated to the bank of England base rate and, regardless of the rate decision, competition within the banking industry is also helping to maintain rates above inflation, especially for notice accounts and 1-year term deposits. With inflation-beating rates we are in a perfect position to mitigate this degradation factor for clients too.

Contact us to find out more.

Leave a Reply

Press Contacts

TWITTER

Insignis Cash's Twitter avatar
Insignis Cash
@InsignisCash

We are excited to announce that, after a period of extraordinary growth, we are expanding our team! We have sever… t.co/el8w1ppwZX

Insignis Cash's Twitter avatar
Insignis Cash
@InsignisCash

The UK Savings market has already seen interest rates fall in recent years. So just how exactly will the introducti… t.co/v4nFlfR4j6

Insignis Cash's Twitter avatar
Insignis Cash
@InsignisCash

After a catastrophic year for savings rates, the current way that HMRC calculates and deducts tax for eligible save… t.co/bMDEnbLuSM

Insignis Cash's Twitter avatar
Insignis Cash
@InsignisCash

As the negative interest rate subject matter continues to pick up momentum, we discuss what business owners may nee… t.co/6cHHepcoJR

Insignis Cash's Twitter avatar
Insignis Cash
@InsignisCash

We are delighted to have won the @SavingsChampion 'Best Cash Platform 2021' Award, recognising Insignis as best in… t.co/X9msqtD7fw

As Featured In: