Interest rates may be impacted as it was announced today inflation rose to 2.5 percent in the 12 months to June. Interest rates tumbled as a result of the COVID-19 crisis, and the Bank of England’s decision to lower its base rate to 0.1 percent. While the central bank’s base rate has remained the same ever since something which isn’t remaining so static is inflation.
He said: “Rising inflation now risks eating into improved finances, gnawing away at the future spending power of cash left languishing in savings accounts at a time of ultra-low interest rates.
“Don’t be fooled by small rises in cash savings rates: real interest rates on cash savings are negative, once inflation is taken into account.
“It is very wise to have some cash set aside for short-term needs and unforeseen emergencies.
“But holding too much wealth in cash for prolonged periods when the bogeyman of higher inflation is stalking the earth is a sure way to get worse off in real terms.”
Mr Hollands warned inflation could be “coming for savings” and therefore urged thoughtful consideration on the…
