Dean Butler, Managing Director for Retail Direct at Standard Life, part of Phoenix Group said: “The Bank of England’s decision to hold the base rate again will come as welcome relief to people facing another difficult winter. Households approaching the end of a fixed mortgage term will be particularly glad of the respite.
“There’s also some good news for people in a position to save. It looks like rates might be peaking, however there’s no sign they’ll start to fall anytime soon and best buy fixed cash savings accounts are currently sitting between 5.5% and 6%. With inflation forecast to fall to around 5% by 2023, cash savings might start to outpace price rises for the first time in a long while. That being said, any gains are still small and it’s worth looking to an investment product like a stocks and shares ISA or, if you’re able to take a long-term approach, a pension for a chance to significantly beat inflation.
“Of course, we’re still a long way from the Bank of England’s inflation target of 2% and the sudden high interest environment has come as a shock to many. But there are some green shoots showing through.”
Henry Shore, Consultant at XPS Pensions Group, commented: “Pension scheme members will be hoping that the Bank’s decision to maintain rates won’t result in inflation falling more slowly, given that current rates of inflation have been eroding the real value of their benefits. However, the decision will still be very welcome news for the significant number of pension scheme members with mortgages, or other debt, to pay off.”
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