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BoE rate hike not enough to help savers

by Insignis Cash Solutions in Announcements

Following today’s Bank of England decision to hike interest rates, Giles Hutson, CEO of Insignis Cash Solutions, comments on what this means for savers:

“The Bank of England’s decision to hike rates for the first time in 10 years is a healthy reminder that low interest rates can’t last forever. The increase of 0.25% will start to release the UK from its unsustainable low rate environment, and help avoid a consumer finance bubble. Increasing rates now reminds society that a low rate climate is not indefinite. This will support better long term financial planning, especially when it comes to deciding how much debt a family or company can afford to take on.

“The benefits of a low rate climate had a limited life and couldn’t last forever. Savers’ cash deposit returns have been obliterated.  That said, this is one small step to normalisation and a single rate rise of 0.25% won’t revolutionise saving in the short term. We need to see two major shifts to boost returns in any meaningful way; continued increased competition in the banking market and overcoming the inertia that holds savers back from managing their cash more actively.”

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Sally Maclachlan
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