In a move that will surprise nobody, the Bank of England has confirmed the base rate of interest will be frozen for another month at least. In all likelihood, the measure will stay at the historical low 0.5% well into next year and possibly beyond.
There will also be no expansion of the quantitative easing programme for the time being. A further injection of funds had been considered as a possibility by some analysts, and the Federal Reserve today said that it will pump $600bn (£373bn) into the US economy.
The base rate has been set at 0.5% since March 2009, when the Monetary Policy Committee (MPC) cut it from 1.0% in the midst of the financial crisis. The prolonged period of low interest rates has proved to be a mixed blessing for consumers.
While savers have seen the potential returns on their funds fall, the low interest rate environment has helped to keep down the number of people defaulting on their mortgage repayments or having their properties repossessed.
The minutes of the MPC's monthly meeting will be released later in the month and will show whether any of the members recommended a rise in the base rate. In the current climate, savers might be best served by tying their money up for the next 12 months, in the hope that a rise in rates may have been implemented or be imminent once the money matures.
Savers can get a cracking rate of 3.04% with Barnsley BS's one year online bond. The account requires a minimum investment of £100 and allows further additions throughout the one year term.
For those who want to start their savings with a slightly smaller deposit, Northern Rock offers a rate of 3.00% from just £1, with customers free to top up their savings in the year.
The Post Office also offers 3.00% and savers can access their funds early, although they must close the account to do so.
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