UK base rate may rise as early as summer

Published:  29 May at 6 PM
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Tagged: Visas, UK, Cyprus, England
Following the May meeting of the Bank of England Monetary Policy Committee, it seems possible that the base rate may be allowed to gradually rise, beginning this summer.

Although the nine-strong committee voted unanimously to keep the rate at 0.5 per cent, where it’s stood since 2009, members are reported to have felt that an earlier rise than has been previously envisaged might be on the cards. Top UK economists are suggesting that the August or September meetings may see several members voting for a rate hike.

Expat savers would welcome a rise, however gradual, as what’s on offer offshore is failing to even cover inflation in their host countries. Fixed rates are at all-time lows, and long-established international branches of high street banks are closing down as their parent companies draw in their horns.

Onshore savings accounts can be extremely difficult to access by expats living outside the EU, and the best on offer offshore is Skipton International’s 2.75 per cent for five years. However, should the base rate rise sooner than expected, the last several years of the fixed rate may be well below what’s then available elsewhere.

Shorter term fixed rates are, to put it mildly, an insult at between 1.35 per cent with Nationwide International for six months to Permanent International’s 1.75 per cent for a year on £20,000 or more. It’s not so very difficult to find a bank in your host country offering more, although security and stability is always an issue, especially after the Cyprus savings raid.

For example, Thai banks were offering between 2.75 and 3.2 per cent fixed for various periods of time between six months and one year and three months. However, last week’s military coup is causing jitters amongst the country’s expat investors, as everything’s now being run by financially inexperienced appointees of the junta’s General.
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