You can tell that it’s summer and it’s sunny outside. There is very little to write home about in the financial press this week and savings stories are virtually non-existent. However, there were some nuggets of interest.
The simple savings story continued this week, with The Times revealing that the top of the list of frequently posed questions to them is “Where can I find the best rate for my savings, my account is earning 0.10%”
This article and another in The Mail on Sunday goes on to warn that it’s not just the rate that you have to look out for, but also to make sure you understand the terms and conditions - otherwise you might not realise that your rate could plummet, for example at the end of the bonus period or if you make too many withdrawals.
The Times, among others, also reported on the fact that latest figures from the Office for National Statistics show that we are saving less. The household savings ratio, the amount of disposable income that we are currently saving, has reduced by 0.40% to 4.10% for the first quarter of 2018, down from the previous quarter at 4.50%.
According to The Times article, this is the third lowest level on record after reaching 3% at the beginning of 2017 and 3.6% in 1963.
It could have something to do with the fact that real disposable income dropped by 0.50% in the first quarter of 2018, which is the largest drop since 2011. Do I hear the MPC finding another excuse not to raise rates in August?
It’s always a worry when people stop saving – but at least consumer borrowing from UK High Street banks is also at a three-year low. According to the Financial Times, total consumer credit, which includes personal loans and overdrafts as well as credit cards, grew at an annual rate of 3.9%, the slowest rate since January 2015.
What was prevalent in the press this week were articles about a midsummer mortgage war.
So, while the experts are still as a whole predicting a base rate rise in August, apparently mortgage lenders such as TSB, Leeds Building Society, The Mortgage Works and Tesco have cut their rates. According to an article in The Mail on Sunday, this could help knock £s off your annual mortgage bill for years. However, this mortgage war isn’t expected to last long – especially if the base rate does increase in August.
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