Expat savers rates may rise in early 2015

Published:  17 Apr at 6 PM
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Tagged: UK, Money, Euro, England
Expat savers frustrated by the literal lack of interest in their fixed term savings accounts may see a light at the end of the tunnel by the second quarter of 2015.

Although, earlier this month, the Bank Of England’s Monetary Policy Committee failed to upgrade its legendarily low interest rate of 0.5 per cent, analysts predict that easing will come in early 2015. Expat savers have been cutting living costs to the bone since 2009 saw the introduction of the rate.

Bets are on that rates will rise before next May’s General Election, with the more cautious preferring the end of 2015 as a likely date. All the positive signs are there, from sterling’s rise against the euro and US dollar through an obviously healthier UK economy and the lowest inflation for four years at 1.7 per cent.

According to leading European and UK economist at HIS Global Insight Howard Archer, spring 2015 seems the prime month for the BOE to begin to inch interest rates upwards, increasing returns as a result. Governor of the BOE Mark Carney agrees, stating that base rates are likely to settle between two and three per cent by 2017, although rises could be gradual.

At the present time, there’s not much to choose between for expat savers, with rates likely not covering inflation in their host countries. One-year fixed rates as a whole are hovering around 1.35 and 1.85 per cent for sums between £500 and £20,000, with the popular 2 per cent rate offered by Permanent Bank International now withdrawn.

Easy access accounts range from 1.25 per cent to 0.8 per cent, with disgruntled expat savers suggesting that the next move may well be paying fees to banks for ‘storing’ their money. For braver expats experienced in banking in their host countries, it’s possible to get 2.5 per cent upwards on a one-year or longer fixed rate and, for larger deposits, higher rates may be available.
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