As inflation plummets, consumers may be on the fence about whether to spend or save any disposable income they may have accumulated throughout the UK lockdown.
Not only is inflation falling, but there is also a downward trend occurring in the savings market, pulling average rates down to new lows. As inflation is expected to rise next year, savers will struggle to outpace its eroding power.
The number of deals able to outpace inflation has risen since last month’s inflation announcement, due to a fall in inflation of 0.3%, from 376 in total that beat 0.8%, to 440 today that beat 0.5%. The predicted rate for inflation during Q2 2023 is 2.0%, but there are no standard savings accounts currently able to beat this.
Statistics released today show the Consumer Price Index (CPI) fell to 0.5% during May, meaning there are 45 easy access accounts, 43 notice accounts, 45 variable rate ISAs, 103 fixed rate ISAs and 255 fixed rate bonds (based on a £10,000 deposit) can now match or beat inflation*. Within that, 35 easy access accounts, 38 notice accounts, 31 variable rate ISAs, 96 fixed rate ISAs and 240 fixed rate bonds pay more than 0.5%.
In June 2019, 104 deals (98 fixed rate bonds and six fixed rate ISAs) could beat 2.0% (May CPI) and in June 2018, only 15 deals could outpace 2.4% (May CPI).