Savers 'could benefit from interest rate rise'
04/08/2006
The Bank of England's decision to raise interest rates yesterday "is clearly good news for savers", according to Ketan Malde, the finance director of Heritable Bank.
However, he suggests that "those seeking new fixed-rates have already begun to benefit as the money markets had already factored in today's rise in the base rate".
This was due to the fact that Heritable Bank had already announced it would increase the interest rates on its four and five-year savings bonds 30 minutes before the Bank of England made its decision to raise rates by 0.25 per cent.
Additionally, banks and building societies hope that, as well as helping people who already save their money, the change in interest rates may motivate other people in the UK to start savings accounts.
Adrian Coles, director general of the Building Societies Association, said that the bank of England's decision "could be beneficial for savers as cash deposit accounts become more attractive".
"It could also give people a wake-up call to put something aside in preparation for less certain economic times," he added.
Yesterday's decision by the Bank of England's Monetary Policy Committee to raise rates to 4.75 per cent is the first time rates have changed in nearly one year and the first time they have risen in two years.
However, he suggests that "those seeking new fixed-rates have already begun to benefit as the money markets had already factored in today's rise in the base rate".
This was due to the fact that Heritable Bank had already announced it would increase the interest rates on its four and five-year savings bonds 30 minutes before the Bank of England made its decision to raise rates by 0.25 per cent.
Additionally, banks and building societies hope that, as well as helping people who already save their money, the change in interest rates may motivate other people in the UK to start savings accounts.
Adrian Coles, director general of the Building Societies Association, said that the bank of England's decision "could be beneficial for savers as cash deposit accounts become more attractive".
"It could also give people a wake-up call to put something aside in preparation for less certain economic times," he added.
Yesterday's decision by the Bank of England's Monetary Policy Committee to raise rates to 4.75 per cent is the first time rates have changed in nearly one year and the first time they have risen in two years.
