Are savings rates on their way down?

ruelle

Thanks for all the comments and very helpful information. Think I'm going to start locking in some fixed rates now. Seen quite a few high interest accounts pulled in the last few days.

eastmidsaver

no one can be sure,  but it is expected the base rate will go up again in December,   so they could rise again then.

retiringtoosoon

eastmidsaver said:

no one can be sure,  but it is expected the base rate will go up again in December,   so they could rise again then.

I think we’ve been through this several times /rolleyes

Desk

The Financial Times is reporting here that global inflation is now likely to have peaked....

https://www.ft.com/content/85498afc-43d3-4525-bee0-7ea7c6c05b34

This would appear to support recent suggestions that the base rate will not now need to reach the heights which until recently had been forecast, and that indeed there might be the potential for it to decline.

This is global inflation, though, and we don't yet know how inflation will pan out in the UK specifically, where it might be a bit more sticky due to a number of factors. One factor is our very low unemployment, although that might change if we plunge into a deep recession. Another factor is the current demands for pay increases, which I understand could result in an inflationary cycle.

As it is, though, I think we're probably going to see the base rate peak at the high 3% or very low 4% at most before falling away.

I still think there's capacity for base rates to 'normalise' at around 5% over time, but I think it will take some time to re-acclimatise so as to give the housing market time to adjust.

pecunianonolet

Desk said:

The Financial Times is reporting here that global inflation is now likely to have peaked....

https://www.ft.com/content/85498afc-43d3-4525-bee0-7ea7c6c05b34

This would appear to support recent suggestions that the base rate will not now need to reach the heights which until recently had been forecast, and that indeed there might be the potential for it to decline.

This is global inflation, though, and we don't yet know how inflation will pan out in the UK specifically, where it might be a bit more sticky due to a number of factors. One factor is our very low unemployment, although that might change if we plunge into a deep recession. Another factor is the current demands for pay increases, which I understand could result in an inflationary cycle.

As it is, though, I think we're probably going to see the base rate peak at the high 3% or very low 4% at most before falling away.

I still think there's capacity for base rates to 'normalise' at around 5% over time, but I think it will take some time to re-acclimatise so as to give the housing market time to adjust.

Article seems to be only available to subscribers.

eskbanker

Rollinghome said:

Not sure if the very useful site www.swallowpark.co.uk is around now.

Only if spelled correctly!

https://www.swanlowpark.co.uk/

pecunianonolet said:

Desk said:

The Financial Times is reporting here that global inflation is now likely to have peaked....

https://www.ft.com/content/85498afc-43d3-4525-bee0-7ea7c6c05b34

Article seems to be only available to subscribers.

Circumvent the FT paywall by following the link, select the article title and paste into a Google search, from where the resultant link takes you straight into the piece.

Patr100

Global inflation feeds through to UK inflation as we import quite a lot of things so the cost of those  (in theory) reduces.

Desk

And now Bullard from the Fed suggests that there's still some ways to go with US base rate increases, suggesting they'll need to reach in the range of 5% to 5.25%

https://www.reuters.com/markets/us/fed-has-a-ways-go-interest-rate-hikes-bullard-says-2022-11-28/

Patr100

Desk said:

And now Bullard from the Fed suggests that there's still some ways to go with US base rate increases, suggesting they'll need to reach in the range of 5% to 5.25%

https://www.reuters.com/markets/us/fed-has-a-ways-go-interest-rate-hikes-bullard-says-2022-11-28/

There's Fed base rate increases 
Then there's BoE rate increases
Then there's Savings rate increases...

Unfortunately one of those does not always follow the other.
(as we found recently)

and as I have said, in a recession, central banks/Govts want to encourage spending
and discourage saving.

Patr100

Longer term eg 1 years savings rates certainly seem to have dropped significantly - roughly at 4.30% so much so that even if this months BoE rate rise eventually prompts a rise in Savings rates , they are only likely to be near previous rates, or lower.
I'm so glad I fixed a month ago at 4.75/85% 

Easy access rates are slightly better in places currently but being variable they are potentially more volatile.