'Last chance' for savers as inflation drop could spark cuts to high interest accounts

'Last chance' for savers as inflation drop could spark cuts to high interest accounts

Liam Halligan on the breaking inflation figures

GB News
Temi Laleye

By Temi Laleye

Published: 20/03/2024

- 11:40

Updated: 20/03/2024

- 11:44

As inflation falls to its lowest level in two years, savers are urged to secure the highest savings rates they can find as a reduction in interest rates could follow

Jeremy Hunt has suggested the central bank could “consider bringing down” the country’s base rate with the Bank’s Monetary Policy Committee (MPC) next meeting tomorrow.

Earlier today, the Consumer Price Index (CPI) rate of inflation for the 12 months to February 2024 eased to 3.4 per cent, from four per cent.

Following the inflation rate announcement, markets are enthusiastic that the Bank of England will hit its two percent target by the end of year, meaning the interest rate will also come down.

A fall to the CPI now means the vast majority of savings deals now beat inflation which is helpful for those savers looking for a competitive return.

After years of low rates, high-yield savings accounts are having a moment as the Bank of England has kept interest rates at a 16-year high of 5.25 per cent.

Financial markets are predicting that the base rate will remain unchanged at 5.25 per cent for the fifth consecutive time, however savers are urged to look around for the best savings rates available.

Man on calculator

Markets are enthusiastic that the Bank of England will hit its two percent target by the end of year


Andy Mielczarek, founder and CEO of SmartSave, a Chetwood Financial company, said: “This is the news consumers have been waiting for. After a surprise uptick in inflation to the year, it is positive to see this drop.

“We have moved closer to the Bank of England's two per cent target, so you’d be forgiven for thinking that things are going back to normal - but underestimate the lasting impact of high inflation at your peril, as the cost of living remains eye-wateringly high.

“After all, prices are still rising at pace, just not as fast as we've become accustomed to.

“Meanwhile, energy bills, property rental costs and slowing wage growth are all contributing towards a stubbornly difficult economic climate.”

Moneyfactscompare.co.uk shared the top rate deals available to savers searching for a competitive return.

There are currently 1,365 savings accounts that beat inflation (151 easy access, 142 notice accounts, 152 variable rate ISAs, 298 fixed rate ISAs and 622 fixed rate bonds).

In March 2023, there were no deals that could beat 10.4 per cent (February 2023 CPI) and in March 2022, there were no deals that could beat 6.2 per cent (February 2022 CPI).

The top savings deals at a £10,000 gross include:

  • Ulster Bank’s Easy access account – 5.20 per cent
  • Hinckley & Rugby BS 180 day notice account – 5.25 per cent
  • MBNA’s one year fixed bond – 5.27 per cent
  • Oxbury Bank’s two year fixed bond – 5.11 percent
  • UBL UK’s three year fixed bond – 4.85 per cent

Mr Mielczarek continued: “All eyes turn to the Bank of England's interest rate decision tomorrow.

“A cut to the base rate is on its way, but we can’t know for sure when that will happen.

“Now might be the last chance people have to fight back against the value lost from their savings by taking advantage of the higher rates of return—however, the clock is ticking.”


The Bank of England could cut the base rate to three per cent by 2025, according to the latest forecasts from Capital Economics.

Wider market expectations continue to also point towards the Bank of England cutting the base rate later in 2024, albeit they have been revised up since the start of the year.

At the start of this year, investors were betting rates could be cut to 3.75 per cent by Christmas.

But it is now thought rates will fall to just 4.5 per cent this year – with the first move expected to come in June

You may like