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Savings Champion

Some Christmas cheer amid the winter blues

Let's start with some good news for some of the 25 million customers of NS&I! Just two months after the government-backed savings provider last increased the rates on all its savings accounts, it's at it again. This time though, it's a bit more selective - but good news nevertheless.

🔖 Read: NS&I delivers some Christmas cheer

Another Monetary Policy Committee (MPC) meeting at the Bank of England and another base rate rise - the 9th in a row. So, base rate is now up to 3.50% - a 14 year high and good news for savers. Added to that, the latest inflation figures were also announced this week and the rising cost of living has eased slightly, perhaps an indication that we are nearing or have reached the peak of the inflation cycle.

But whilst it's eased slightly, the Consumer Prices Index (CPI) still recorded that prices increased by 10.7% in the 12 months to November 2022 - so still painful. Why is the cost of living remaining so stubbornly high?

🔖 Read: The base rate is up, while inflation is down - good news for savers?

Inflation and interest rates continue to dominate and influence global investment markets as well as savings rates, so this is a key element of TPO’s Investment Market Update this month. This time though, the TPO Investment Team review the causes of what was a tumultuous 2022 and look ahead into a new year.

🔖 Read: December Market Update - The Ghost of Markets Past

A year on since the Bank of England started raising interest rates, savings rates are the highest they have been for more than a decade. Last year, if you had £50,000 in an easy access savings account, the most you could have hoped to earn was £350 a year – today you can quadruple that and earn over £1,400 a year!

With such a significant improvement to the amount of interest we savers can earn, I was delighted to have been invited to speak at The Private Office's latest webinar - TPO Markets Matter: Finding Calm Among Chaos. Unsurprisingly, inflation and cash savings were the main focuses as we discussed how the latest economic turmoil is affecting our savings and investments and your wealth. It was really well attended, so thanks to all of you who came along. If you missed it, the good news is that you can watch it again at your own leisure.

🔖 Watch again - TPO Markets Matter : Finding Calm Among Chaos.

Last but not least is our regular Rates Rundown. As expected for the 9th time in a row, the Monetary Policy Committee of the Bank of England voted to increase the base rate. We won't feel the effects of this latest rise yet, but there continues to be some activity further to the previous increase in November. And what does this mean for Fixed Rate Bonds? 

🔖 Read: Rates Rundown - will the latest base rate rise spark more competition?

That’s it from us this week. See you in a couple of weeks - on New Years Eve. Should you need any help over the festive period, our open days are below. If not, we'll see you in the new year from 3rd January 2023. 

We're open...

19th - 21st December: Open as normal
Thursday 22nd December: Closed
Friday 23rd December: Closed

Monday 26th December: Bank Holiday
Tuesday 27th December: Bank Holiday
28th  - 30th December: Open as normal

Monday 2nd January: Bank Holiday

Enjoy the holidays

All the best

Anna

Anna Bowes
Co-founder
Savings Champion

NS&I delivers some Christmas cheer

NS&I has increased the rates on its easy access accounts and the Prize Fund rate for Premium Bonds for the second time in just a matter of months.

This is good news for NS&I savers and in particular for those who have large amounts of cash, as any money deposited with NS&I is protected by HM Treasury and you can add up to £1m into Income Bonds and £2m in the Direct Saver account.

Which rates have been increased? >>

The base rate is up, while inflation is down - good news for savers?

This week, the Bank of England’s Monetary Policy Committee (MPC) voted, for the 9th time on the trot, for a hike in the base rate – this time by 0.5%. The base rate is now at a 14-year high of 3.50%, although not all the members of the MPC voted for a rise, illustrating that we could be nearing the end of the interest rate increases.

This hike follows the news that the rising cost of living eased slightly in the 12 months to November – although the Consumer Prices Index (CPI) shows that on average, prices rose by 10.7% over the year.

Why is inflation remaining stubbornly high? >>

December Investment Market Update
The Ghost of Markets Past 

2022 has been an interesting year with significant market and geopolitical disruption. In many ways, this was the year that the old world returned and the previous paradigm of globalised trade, restrained major power competition, low interest rates, and low inflation was overturned.

Investors have grown accustomed to low inflation, low geopolitical unrest, and low interest rates over the last 40 years. As these presumptions have been disproved and Central Banks have been compelled to respond, financial markets have reacted with volatility.

How have markets fared and what does the future hold? >>

Rates Rundown - will the latest base rate rise spark more competition?

As expected, the Bank of England increased the base rate at the latest Monetary Policy Committee meeting this week. However, the expectation is that we are now nearing the top of the interest rate cycle.

That said, hopefully this latest rise and the new year will mean that there will be a resurgence in the competition that has generally been slowing down somewhat. That said, there have been some unexpected gems to report over the last couple of weeks.

What are the best rates right now? >>

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*We are occasionally paid by some providers if you click through from our Best Buy Tables and open a savings or current account with them. We will never accept a payment that compromises in any way our independent, whole of market approach to providing information on savings products. For clarity we will indicate those companies who remunerate us with an asterisk (*).

†High interest current accounts often have a number of conditions attached to qualify for the headline rate. Please ensure you carefully read the terms and conditions before proceeding. Many of these current accounts do not require customers to switch their main account.
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