The Bank of England has surprised analysts today after pausing interest rates at 5.25% – in a move that will be welcomed by homeowners.
The central bank had been expected to rise rates to 5.5%, however, its monetary policy committee voted by a 5-4 majority to maintain current levels.
It’s the first time in two years that a decision has been made to not increase the base rate following 14 consecutive increases and comes after it was revealed the UK’s annual inflation rate slowed to 6.7% last month.
Lucinda O’Brien, expert at money.co.uk savings accounts, said: “The pausing of the base rate will be welcomed by homeowners and those hoping to get on the property ladder.
“Previously, mortgage rates had increased to more than 6% on two and five-year fixed-rates, putting extreme pressure on anyone with that type of mortgage.
“Hopefully, this news will mean rates start to calm down for borrowing. But on the flip side – what will it mean for your savings?
“So far, the base rate rises have positively impacted interest rates on savings accounts and we’ve seen rates climb on all types of accounts.
“Fixed-rate savings accounts have issued some of the best rates with more than 6% if you are prepared to lock your money away for a fixed amount of time. Easy and instant access accounts have also been rewarding savers with around 5% in return for more flexibility.
“But it’s regular savers where the big rates lie, as Nationwide recently revealed its 8% Flex Regular Saver, which allows customers to save up to £200 every month for 12 months.
“This shows there are still great deals for savers, but the key is always to compare savings accounts to find the best rate that suits your needs.”
For more information and guidance on saving, including the best savings rates available today, visit: https://www.money.co.uk/savings-accounts
