Inflation fears at the Bank of England
22 April 2010 / by Lois Avery
Concerns about inflation have been revealed in minutes from a meeting of the Bank of England’s monetary policy committee (MPC).
The monthly MPC meeting brings together the nine Bank of England rate setters to decide what the interest base rate should be set at.
At a meeting earlier this month all nine MPC members unanimously voted to keep the rate set at an all time low of 0.5 per cent and to halt pumping any more money into the economy with quantative easing, amid fears about the affect any further inflation rises could have.
Figures released on Tuesday showed that in March inflation increased to a higher than expected 3.4 per cent, well above the 2 per cent target.
The minutes, published yesterday, show committee members are worried about high oil prices pushing up the cost of living in the UK, against a weak pound.
In the minutes members said, “There was a range of views among Committee members about how the balance of risks to inflation and activity had altered over the past few months.
“Output looked more clearly to have begun to recover at the end of 2009 and with a momentum that appeared to have been carried forward into the beginning of 2010.
“Oil and some other commodity prices had risen substantially over the past two months, raising the near-term outlook for inflation.
“Although measures of households’ medium-term inflation expectations had remained reasonably stable, some measures of financial market participants’ inflation expectations had been drifting up.
“Given that a period of above-target inflation was in prospect at a time when monetary policy was exceptionally accommodative, this was a source of concern to some members.”
As well as causing concern for Bank of England officials the inflation hike looks set to punish savers, who will struggle to find accounts with interest rates high enough to offset the effects of inflation.
To compare savings deals click here »
© Fair Investment Company Ltd
Sorry, your search has returned no results. |
* Income payments and returns are dependent upon the FTSE 100 Index.
Provider | Account | Interest Rate (AER) | Term | Apply |
---|---|---|---|---|
The Access Bank UK » |
3 Year Fixed Rate |
2.20% per annum |
£5,000 | Apply Now > |
Earn 2.20% fixed interest – 3 year term – Minimum deposit £5,000 – No withdrawals permitted. FSCS Protected | ||||
The Access Bank UK » |
2 Year Fixed Rate |
2.02% per annum |
£5,000 | Apply Now > |
Earn 2.02% fixed interest – 2 year term – Minimum deposit £5,000 – No withdrawals permitted. FSCS Protected | ||||
Vanquis Bank » |
4 Year Fixed Rate Bond |
2.40% per annum |
£1,000 | Apply Now > |
Earn 2.40% gross/AER fixed for 4 years. Save £1,000 – £250,000. No withdrawals during the term. Individual or joint accounts available. Annual or monthly interest. FSCS Protected | ||||
The Access Bank UK » |
1 Year Fixed Rate |
1.72% per annum |
£5,000 | Apply Now > |
Earn 1.72% fixed interest. 1 year term, save from £5,000 to £500,000, no additional deposits or withdrawals permitted, FSCS Protected | ||||
Vanquis Bank » |
3 Year Fixed Rate Bond |
1.85% per annum |
£1,000 | Apply Now > |
Earn 1.95% gross/AER fixed for 3 years. Save £1,000 – £250,000. No withdrawals during the term. Individual or joint accounts available. FSCS Protected |
Sorry, your search has returned no results. |
* Income payments and returns are dependent upon the FTSE 100 Index.
Provider | Account | Interest Rate (AER) | Term | Apply |
---|---|---|---|---|
RCI Bank » |
Freedom Savings Account | 1.30% | Instant Access | More Info > |
MARKET LEADING. Earn 1.30% gross/AER. Instant Access. No notice periods. Unlimited payments and withdrawals. Pay in from £100. RCI Bank are protected up to a total of €100,000 by the FGDR, the French deposit protection scheme. Manage account online. | ||||
Ford Money » |
Flexible Saver |
1.22% |
Instant Access | More Info > |
Earn 1.22% AER variable interest. Interest can be paid monthly or annually. Open an account singly or jointly. Minimum deposit £1. Unlimited deposits and withdrawals permitted. FSCS Protected | ||||
AA Savings » |
Easy Saver | 1.15% | Easy Access | More Info > |
1.15% gross/AER. Instant Access. Free withdrawals and no notice period. Deposit from £100. Includes a fixed bonus of 0.95% gross fixed for the first 12 months. Quick and easy online application | ||||
Aldermore Bank » |
Easy Access Account | 1.00% | Easy Access | More Info > |
1.00% gross/AER on balances from £1,000 to £1 million. Unlimited withdrawals without restriction or loss of interest. |
Gross is the interest you will receive before tax is deducted.
AER stands for the Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once each year.
Sorry, your search has returned no results. |
$(document).ready(function(){ $("#ctl13_GeneralComparisonTabsTable1_divTablesWraper .comparison_table_tabs_container a").click(function(){ var $this = $(this); var TableStyle = ''; var $tab;
if (TableStyle=='uswitch') $tab = $this.parent('li'); else $tab = $this.parent('div').parent('div').parent('td');
var $activeTab = $('#ctl13_GeneralComparisonTabsTable1_divTablesWraper .comparison_table_active_tab');
if ($tab.attr('class')=='comparison_table_active_tab'){ return false; }
$activeTab.removeClass('comparison_table_active_tab'); $activeTab.addClass('comparison_table_inactive_tab');
$tab.removeClass('comparison_table_inactive_tab'); $tab.addClass('comparison_table_active_tab');
$('#ctl13_GeneralComparisonTabsTable1_divTablesWraper .TableTabDiv').hide(); $('#ctl13_GeneralComparisonTabsTable1_divTablesWraper #' + this.className).show();
return false; }); });
function openFactSheet(url) { var w = window.open(url, '', 'width=1000,height=800,scrollbars=yes,resizable=yes'); w.focus(); }