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Inflation falls again

Inflation falls again

Category: Savings
Author: Lieke Braadbaart
Date: 23/05/2018

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

For the second month in a row, the Consumer Price Index measure of inflation has seen a fall, this time from 2.5%, recorded in March, to 2.4% in April. This means that even more savings accounts can now once again beat inflation, especially if you take a look at the long-term fixed rate bonds, with 16 savings accounts now able to match or beat it.

What's more, rate rises outweighed rate cuts in April for the 16th consecutive month, with 86 rises compared to 27 individual cuts. While this is the lowest number of increases recorded since April 2017, it means rates are still largely moving in the right direction, so savers should have plenty of reason to cheer.

"Savers will have been disappointed by the Bank of England keeping the base rate on hold earlier this month," said Charlotte Nelson, finance expert at moneyfacts.co.uk. "Hopefully, inflation falling will lessen the pain, as it means that, for some, their savings will go a little further."

Indeed, there's plenty to be cheerful about, as there have been a whopping 800 rate rises since the base rate was increased last November. The fixed rate bond sector has particularly benefitted. "For example, the average two-year fixed rate bond stands at 1.50% today, 0.07% higher than November, and marking the first time the two-year average has risen to 1.50% since April 2016," Charlotte stated.

Most of this welcome competition still comes from challenger banks, who continue to fight amongst themselves for the top spots in the charts. Simply looking at the easy access account sector shows that newer banks are dominating the charts, with high street providers offering an average easy access rate of just 0.30% compared to the market average of 0.51%.

Without an ability to predict the future it's hard to tell when the next base rate rise might happen, or even how it would affect rates. With so much uncertainty, Charlotte points out that "The best possible option for savers is to stay on top of the Best Buys and keep a little money aside ready to move if a good deal comes their way."


What next

Why not click over to the savings Best Buy charts right now to see what the top rates are?

Disclaimer: 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.

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