Upcoming Sept Bank of England Interest Rate Review

Binman61

Hello,
Looking for some good 1yr fixed rate savings account and ISA accounts. On 21st Sept 2023 the Bank of England will be reviewing interest rates again. Is it worth waiting until after that meeting to get the better rates? How long would it be for the expected 0.25 rate rise to work through to savings products?
Trying to balance out lost interest at a good interest today versus a possible better rate in hopefully a few short weeks. The money is currently in a 4.3% instant access account.

What recommendations or insights do you offer.

Thanks.

mebu60

NS&I 1 Yr fix 6.2% available now. Perhaps put 50% or so of intended fix funds in that now. Bird in the hand and all that. Then see what is available October time. 

PloughmansLunch

mebu60 said:

NS&I 1 Yr fix 6.2% available now. Perhaps put 50% or so of intended fix funds in that now. Bird in the hand and all that. Then see what is available October time. 

... plus you can always cancel this bond within the first 30 days and keep the interest if something better pops up, or open another NS&I bond and rinse and repeat (subject to still being available) if nothing better is on the market. In retrospect I really wish I'd done this, as I still have 7 or so months to go locked in at the old old rate of 3.9%

25_Years_On

Binman61 said:

Hello,
How long would it be for the expected 0.25 rate rise to work through to savings products?

Fixed savings rates are based on long term interest rate projections and it was considered a while ago that we may have reached the top and certainly two year fixes and longer are lower than one year fixes. While some companies might try and compete with the NSI rate I don't think there will any increase above that. Generally top rates have been hovering around 6% for a while even though the BOE rate has increased.

Sg28

25_Years_On said:

Binman61 said:

Hello,
How long would it be for the expected 0.25 rate rise to work through to savings products?

Fixed savings rates are based on long term interest rate projections and it was considered a while ago that we may have reached the top and certainly two year fixes and longer are lower than one year fixes. While some companies might try and compete with the NSI rate I don't think there will any increase above that. Generally top rates have been hovering around 6% for a while even though the BOE rate has increased.

However recent increases in oil prices and more stubborn inflation across the western world could mean even higher base rates in the short to medium term.

Middle_of_the_Road

25_Years_On said:

Binman61 said:

Hello,
How long would it be for the expected 0.25 rate rise to work through to savings products?

Fixed savings rates are based on long term interest rate projections and it was considered a while ago that we may have reached the top and certainly two year fixes and longer are lower than one year fixes. While some companies might try and compete with the NSI rate I don't think there will any increase above that. Generally top rates have been hovering around 6% for a while even though the BOE rate has increased.

It's not a certainty that they'll raise the base rate at the next meeting. Are the latest inflation figures due before the BOE meet.?
If so, and inflation has fallen again, we might se them leave the rate at 5.25%

If I was looking to get a fixed rate now, I would do the 1 year NS&I 6.2% as I don't think they'll increase it, even if the base rate is raised.
If others become available above 6.2% you can cancel it as previously mentioned.

Middle_of_the_Road

Sg28 said:

25_Years_On said:

Binman61 said:

Hello,
How long would it be for the expected 0.25 rate rise to work through to savings products?

Fixed savings rates are based on long term interest rate projections and it was considered a while ago that we may have reached the top and certainly two year fixes and longer are lower than one year fixes. While some companies might try and compete with the NSI rate I don't think there will any increase above that. Generally top rates have been hovering around 6% for a while even though the BOE rate has increased.

However recent increases in oil prices and more stubborn inflation across the western world could mean even base rates in the short to medium term.

Did you miss out the word 'higher' ?

Sg28

Middle_of_the_Road said:

Sg28 said:

25_Years_On said:

Binman61 said:

Hello,
How long would it be for the expected 0.25 rate rise to work through to savings products?

Fixed savings rates are based on long term interest rate projections and it was considered a while ago that we may have reached the top and certainly two year fixes and longer are lower than one year fixes. While some companies might try and compete with the NSI rate I don't think there will any increase above that. Generally top rates have been hovering around 6% for a while even though the BOE rate has increased.

However recent increases in oil prices and more stubborn inflation across the western world could mean even base rates in the short to medium term.

Did you miss out the word 'higher' ?

I did indeed! Thanks.

VNX

I think we are more likely to see rates remain high for longer than rise much higher in the short/medium term. 

One more 0.25 with a pause I think but who knows!

as has been said no guarantee a 0.25% will be passed on as always it’s personal opinion

Albermarle

It's not a certainty that they'll raise the base rate at the next meeting

There has been some talk about keeping current rates where they are for longer , as opposed to increasing them further and then reversing the rises quicker.

OP - as said above, long term fix rates are not really affected directly by current rates, as they are making a judgement over the whole term of the fix.

Why are you only looking at one years fixes? Nobody knows for sure but longer fixes could be the way to go.

jimjames

Middle_of_the_Road said:

25_Years_On said:

Binman61 said:

Hello,
How long would it be for the expected 0.25 rate rise to work through to savings products?

Fixed savings rates are based on long term interest rate projections and it was considered a while ago that we may have reached the top and certainly two year fixes and longer are lower than one year fixes. While some companies might try and compete with the NSI rate I don't think there will any increase above that. Generally top rates have been hovering around 6% for a while even though the BOE rate has increased.

It's not a certainty that they'll raise the base rate at the next meeting. Are the latest inflation figures due before the BOE meet.?

Inflation figures are normally around mid month so yes they will be before the meeting