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2d ago

Cash Savers Face Real-Term Losses as Base Rate Cut Looms

With inflation at 3.6% outpacing sub-2% easy-access rates, experts warn that shoppers must secure higher yields before the Bank of England’s August 7 rate cut.

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Overview

  • June’s 3.6% inflation rate now exceeds easy-access savings returns of 1.05–1.30%, eroding the real value of cash deposits.
  • Moneyfacts data show more than 1,200 products—including 636 fixed-rate bonds and 119 easy-access accounts—offering rates above inflation, with top offers near 5%.
  • Switching £10,000 from a typical high-street easy-access account to a one-year fix at 4.5% can boost earnings by around £300 over 12 months.
  • The Bank of England is widely expected to cut its base rate from 4.25% to 4.00% on August 7, a move that could drive standard savings rates even lower.
  • Personal finance analysts urge savers with sub-2% accounts to review options and transfer funds to higher-yield products before the anticipated rate reduction.