Bank of England 15 December 2022

ForumUser7

Today, the Bank of England has increased its base rate by 50 basis points, to a new rate of 3.5%.

"Six members (Andrew Bailey, Ben Broadbent, Jon Cunliffe, Jonathan Haskel, Huw Pill and Dave Ramsden) voted in favour of the proposition. Three members voted against the proposition. Two members (Swati Dhingra and Silvana Tenreyro) preferred to maintain Bank Rate at 3%. Catherine L Mann preferred to increase Bank Rate by 0.75 percentage points, to 3.75%."

Hopefully we'll see some savings providers increase their rates before Christmas, but it'll likely be January for most.

Thoughts?

Source ~ https://www.bankofengland.co.uk/monetary-policy-summary-and-minutes/2022/december-2022?sf173764954=1

*EDIT* After the polite reminder by @coldiron, I have reviewed which threads this post is in, and used the 'thanks' feature to gauge where it is helpful to leave it present. In the threads where no one reacted to the post with a thumbs up, I have removed it. In the threads where people did reply with a thumbs up, I believe it was useful to them, and will therefore leave it untouched. If this is causing anyone any issues, please just politely let me know and I will respond and action any necessary feedback. If forumites are rude or sarcastic, such as the response I got in the regular saver thread, I am very unlikely to action their feedback.

RobM99

As usual - BoE rate up 0.5%, savers' rates up 0.2% by any chance?

t1redmonkey

As expected really, 2 known doves voting for no increase, 1 known hawk voting for a larger increase, everyone else in the middle.  I don't think there will be much movement on bank rates before the new year, don't think most of them want the increased workload it would bring them at a time of year when most of them have reduced staffing levels.

Eirambler

0.5 is as expected, and I don't think we'll see too much change to savings rates. Often the guidance that comes with these is as useful as the actual rate confirmation. In this case the guidance is still for a prolonged shallow recession, so rates are not expected to go much above 4% in the coming months. Therefore still no suggestion that fixed savings rates will go higher and, if anything, some of the better fixes may be pulled altogether.

ForumUser7

At the bottom of page 4 of the monetary-policy-summary-and-minutes-december-2022.pdf it says:

"The majority of the Committee judges that, should the economy evolve broadly in line with the November Monetary Policy Report projections, further increases in Bank Rate may be required for a sustainable return of inflation to target."

So it seems like the rate will increase further in the months to come. Hopefully we will see some good movement in the easy access market - I'm surprised Al Rayan hasn't done anything with their rates recently tbh, they tended to be table toppers!

AmityNeon

ForumUser7 said:

So it seems like the rate will increase further in the months to come. Hopefully we will see some good movement in the easy access market - I'm surprised Al Rayan hasn't done anything with their rates recently tbh, they tended to be table toppers!

They have always been, and still are, for unrestricted easy access, and haven't budged an inch. All accounts higher than 2.85% AER have been limited, restricted, or very short-lived. It would be nice if providers increased their rates, but I guess most simply have no reason to.

sharpe106

I doubt we will see to much change as it was expected to go that rate and the rates have been dropping slightly last few weeks anyway. 

So maybe return to the rates of a few weeks ago but probably not to much change. 

Johnjdc

Fixed rates probably slightly down - the market was not expecting anyone to vote for a freeze and one member did, market rates and currency fell slightly today. Instant access I'd expect that by 1st January we'll have a reasonable number of accounts over 3%. Hoping to get 3.25% (including bonus) from Marcus in the next month or two for my IA... if not, may move. Not got that much in IA anyway though.

25_Years_On

Johnjdc said:

 Instant access I'd expect that by 1st January we'll have a reasonable number of accounts over 3%. Hoping to get 3.25% (including bonus) from Marcus in the next month or two for my IA... if not, may move. Not got that much in IA anyway though.

I think you're being very optimistic. Since the last increase the trend has been few increases, some accounts restricted to existing account holders or withdrawn and Marcus removed the bonus for new customers. The other trend is for more esoteric offerings like the HBSC saver and an upward trend in regular savings accounts. The only thing that might happen with Marcus is the bonus comes back and existing customers are allowed to renew that. I expect almost no change in easy access rates.

Richard1212

I think the usual top 10 most competitive Banks/BSs over the past year or two ( Marcus, RCI, Virgin,etc ) will go higher in the New Year and I think we may see over 3%). I, like 25_ years_ on  (above), hope Marcus ( my favourite savings bank in recent years) will extend their bonus.