Rise In CPI Means That Most Savings Accounts Cannot Keep Above The Inflation Rate

Nowadays anyone looking to put some money away in a savings account to accrue interest will be sorely disappointed. There are now no standard instant access or fixed rate savings accounts that will match or beat inflation. The average saver needs to earn 5.0% interest on their savings so that they keep up with inflation but this is just not possible under current economic circumstances. CPI has now reached twice the government’s stated target and this situation is beginning to make the Bank of England look impotent.

Rising inflation is not just a problem for savers, those first time buyers with mortgages will be in trouble if the Bank of England suddenly reacts to inflation by raising interest rates. Pensioners are probably the worst hit as they have to suffer the combined effects of low interest rates and high inflation on their pensions.

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