With official statistics revealing that the Consumer Prices Index measure of inflation once again remained at 2.4% in June, savers will now have 24 fixed rate bonds (based on a £10,000 deposit) to choose from (among those available to all UK customers) that can beat or match this rate. This might not be exactly what savers were hoping for, especially with Bank of England Governor Mark Carney keeping a close eye on inflation and similar statistics to base his base rate decision on.
Nonetheless, there is plenty of positive news to report. After yesterday's news that fixed bond rates are on the up and Monday's reveal that the easy access market is showing some signs of recovery, savers already have plenty to be cheerful about. However, there's even more, as the 142 savings rate rises seen in June marked the highest figure since December 2017.
|Number of savings rate rises||14||125||237||142|
|Number of fixed rate bond rises||11||97||35||106|
|% of rises that were fixed bonds||79%||78%||15%||74%|
|Average fixed rate bond rise||0.14%||0.15%||0.22%||0.12%|
"The significant number of rate rises towards the end of last year was predominantly influenced by the last base rate rise, with 157 rises in November and 237 in December," said Rachel Springall, finance expert at Moneyfacts.co.uk. "While savers have not been rewarded with another base rate rise, providers have been actively increasing rates regardless."
And that's not the only difference, with the majority of rate rises coming from changes to fixed rate bonds, as can be seen in the table above. While savers still have plenty of reason to hope for a rise in base rate, this latest data suggests the savings market can keep recovering even if one does not occur.
Much of the welcome activity last month, as usual, came from challenger banks looking to tweak their market position. Rachel commented: "One of the many challenger banks to improve rates consistently is OakNorth, increasing its one-year bond to now pay 1.96%, up from 1.80% at the beginning of May." With only 62 overall cuts in comparison – making it the 18th month running that rises have outweighed cuts – the savings market is clearly heading in the right direction.
"As [these] providers will likely keep tweaking rates, some savers may prefer to wait before they invest in a fixed bond, especially with the expectation of a base rate rise before the end of the year," Rachel concluded. "However, by waiting to invest, there is the risk that challenger banks could decide to cut deals or pull the offer altogether, should their funding targets be met. With all this in mind, savers may want to grab the best deals while they have the chance, but be realistic about how long they are prepared to invest."
Have a look at our fixed rate bonds to see the latest top rates. Alternatively, if you're waiting for rates to increase further before putting aside your pot, you may want to ensure that the funds are sitting in a competitive easy access account in the meantime.
Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.