Fixed rate bond market soars after unexpected inflation figures

Since last Wednesday, there are now 43 more fixed rate deals which offer 5% gross or more.

The best fixed bonds have mostly increased in rate over the last week as fresh concerns surfaced that interest rates are yet to peak.

This followed worse-than-expected inflation figures from the Office for Nationals Statistics (ONS) last Wednesday.

According to Moneyfacts data, there were seven fixed rate offers which offered 5% gross or more on the morning the ONS released its inflation data. Today, this figure has grown to 50.

In addition, there were 11 providers which offered 5% AER or more last week Friday, according to the Moneyfactscompare.co.uk weekly savings roundup. Since then this number has increased to 14, with the one and two year charts offering some of the best rates across the market.

For example, National Bank of Egypt (UK) Limited through Raisin UK – a savings platform –now offers 5.25% AER for a one year bond.

On the two year chart Tandem Bank also matches this rate with SmartSave following suit at 5.21% AER.

As mentioned in our weekly savings roundup last week, Investec Bank plc’s two year fixed rate through Raisin UK offered 5.15% AER last week Friday.

This was the best rate across the fixed rate market, with SmartSave topping the one year chart at 5.07% AER.

Earlier this week, the one year chart entertained the best rates on the market.

This changed yesterday after Tandem Bank upped the rate on its five year fixed deal to 5.35% AER, making it the best fixed rate on the market since 2010.

In comparison, last Friday the best five year fixed rate on the market sat at 5.01% AER.