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After so many signs pointed to an impending rise in base rate, comments from the Bank of England's Governor Mark Carney and the recent decrease in inflation see only 7% of UK households now expect a rate hike next month. This may be great news for homeowners, but also disappointing to hear for savers across the country.
That's because a base rate rise means increases to other interest rates, which is something generally only savers want to see. The statistics, which come from the IHS Markit Household Finance Index, further show that less people now expect a base rate rise in the next six months, although 78% of respondents still expected one in the next 12 months.
"Partly reflecting softening inflation, the April survey revealed a drop in the number of households expecting a rate rise in the near future," commented Sam Teague, economist at IHS Markit. "Approximately 28% of respondents forecast a Bank of England rate hike over the next three months, down from 33% in March's survey."
In other disappointing news, the survey also recorded a continued squeeze on household budgets. As a result, households remain pessimistic about their financial condition for the year ahead, as well their relative job security, despite an overall increase in incomes and workplace activity.
According to Sam, "The average amount of cash available to spend continued to fall, likely linked to higher prices and rising interest rates. [At the same time,] spending is up, which meant the average family once again had to eat into their savings or resort to credit to fund the higher spending."
Those savers who have been waiting on the base rate to be raised in May might want to think again, and take a look at our savings charts to see if they can find a good rate now – especially as some savings providers have been pleasantly active of late.
Meanwhile, those who are having to resort to credit to get by might want to go to our credit card charts to try and minimise the interest they will need to pay on their essential spending.
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