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Bank member votes for interest rate rise again

Bank member votes for interest rate rise again

Category: Economy

Updated: 21/07/2010
First Published: 21/07/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
A member of the Bank of England's Monetary Policy Committee (MPC) voted to increase the base rate of interest for the second consecutive month.

Minutes from the MPC's monthly meeting showed that Andrew Sentance voted to increase the measure by 0.25% to 0.75%.

Mr. Sentance found himself overruled by the other seven members of the Committee, however, as they all voted to maintain the base rate at its current level of 0.5%, where it has remained since March 2009.

It is the second month in succession that Mr. Sentance has voted for interest rates to be increased slightly.

"We believe such a move would be misguided given the tough fiscal measures announced in the Budget," said David Kern, chief economist at the British Chambers of Commerce

"Raising interest rates too soon would further increase the risks of a double-dip recession.

"We support the majority decision to maintain the current approach, and we believe the need for increasing the size of the quantitative easing programme may have to be considered if the economy weakens."

The combination of low interest rates and high inflation continue to hamper savers, who are increasingly seeing their pots being eroded.

The good news is that there are still competitive rates to be had, and Best Buy tables are a good place to start.

If you're looking for a high rate for a single year, then ICICI Bank UK offers 3.10% on deposits of £1,000 or more, while those looking for a simpler deal might be tempted by Sainsbury's Finance's Easy Saver which pays 2.70% on minimum investments of just £1 and allows withdrawals.

Internet savvy savers may want to protect their interest from the taxman with Nationwide's e-ISA, which pays 2.69% for one year and allows transfers in and withdrawals.

Savers looking for a slightly longer term can get a competitive rate of 3.00% for two years with Barnsley Building Society's fixed rate ISA.

Investors prepared to lock their money away for longer can get a rate of 4.75% from ICICI Bank UK's five year bond.

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