Bank of England Governor Mark Carney signals rate rise

24th July 2015

Bank of England Governor Mark Carney signals rate rise

In a recent speech, the Governor of the Bank of England Mark Carney gave his biggest indication yet that a rise in the base rate is coming soon, maybe as early as the turn of the year. He stated that once normalisation begins, interest rates increases would proceed slowly and rise, he believes, to a level in the medium term of around 2%.

For savers, a rise in the Bank of England base rate has been a long time coming. I’m sure we speak for all savers in saying 'bring it on'. Savings rates have been in the doldrums for far too long, with savers sacrificed in favour of borrowers.

All signs point to a rise in the base rate; not least the increased competition and activity from providers, which has led to an increase in savings rates for new customers, ranging from easy access accounts to fixed rate bonds.

The increased activity has seen rates improve by almost 10% since the beginning of June and we hope to see things continue. Best buy savings rates for notice accounts and 1 year fixed rate bonds are at their highest level in almost two years and the battles for the top spot in the tables rage on.

It may have been over six years since the last base rate change and over eight years since it was last increased, but the last three years have been devastating for savers, with thousands of savings accounts cut to record low levels. So, it’s encouraging to see these green shoots in the savings market.

Sadly, that doesn’t mean savers can rest on their laurels; rates change and not all savers are fully informed of how competitive, or not, their accounts are, when compared to the whole market.

At Savings Champion we monitor each and every individual savings rate, new and old, live and closed to new business. All of our customers are kept fully updated when rates do change, now and in the future. We’ll monitor each providers’ movements, who’s playing fair and the tricks that no doubt many providers will use to pull the wool over savers’ eyes.

It may have been over eight years since the last rise in the base rate but our memory and experience is long. We suspect providers will soon be back to their old tricks so even when the base rate does rise, few savers will reap the full benefits. That’s why we believe all savers should be signed up to our free Rate Tracker Service, as we’ll keep them informed of any changes to their accounts and tell them when they can do better. With £160 billion sitting in easy access savings accounts paying 0.50% or less it's clear that thousands of savers could benefit from this free service.

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