What is the news about rising interest rates?
So, the good news is that the level of unemployment is falling…. Frankly that’s worth celebrating as it is employment that creates wealth for society (not property). However no sooner had the news broken by the ONS that inflation was also lower than expected (eh?…who are they kidding?) than the media outlets were latching onto the new Governor’s suggestion that unemployment of 7% would lead to a reconsideration of the base rate (currently at an all time low of 0.50%). The way the story has been reported you would think that we should all panic about rising interest rates.
Beware of Headlines…
Although I am not a betting man, I’d hazard a guess that some bright spark will at some point use a headline like “interest rates set to double” or “interest rates set to increase by 100%” both of which would mean that 0.50% becomes 1.00%. Now grab your credit card and have a look at the APR…. or those lovely payday loan companies who advertise pretty much everywhere..
Caution: Your country is at risk if you do not keep up repayments
Debt is still very much a problem in the UK and the Government is in deeper than any of us. So they have to tread a careful line to ensure that loans are affordable…. Including their own to you and I. So I wouldn’t panic too much about rising interest rates at the moment.
Deposits and Annuities
So those of you with savings or hoping for a sudden improvement in annuity rates are likely to be disappointed. For the record here are some of the better deposit rates around at the moment. Yes they really are that bad!
|Account Type||Best buy||£5,000 lump sum investment|
|INSTANT ACCESS||Best online||Sainsburys Bank||1.55%||/|
|Best High Street Bank||Virgin Money||1.51%||/|
|Best Building Society||West Bromwich BS||1.60%||/|
|FIXED RATE CASH ISA||Best online||Skipton BS||3.00%||5 year fixed||/|
|Best High Street Bank||Virgin Money||3.00%||5 year fixed||/|
|Best Building Society||Skipton BS||3.00%||5 year fixed||/|
|VARIABLE RATE CASH ISA||Best online||Kent Reliance BS||1.80%||60 days||/|
|Best High Street Bank||Virgin Money||1.75%||/|
|Best Building Society||Earl Shilton BS||1.80%||90 days||/|
As for me, I’m off to celebrate my eldest daughter’s 21st birthday. Yes I really am old enough.
Dominic Thomas: Solomons IFA