Moneyfacts Group plc, the UK’s leading provider of retail financial product data, has published the latest issue of its ‘INTEREST’ publication.

‘INTEREST’ seeks to identify the effects, positive or negative, interest rates have on the main sectors of the economy.

The Consumer Price Index (CPI) remained at the 2% target in June for the second consecutive month, which should be a signal to the Monetary Policy Committee (MPC) to keep the Bank of England base rate exactly where it is at 5.25%. An inflation rate below the Government’s objective of 2% will be as damaging to the economy as an inflation rate above it. The next two CPI announcements on 14 August and 18 September will be crucial to whatever decision the MPC makes on 19 September.

Issue nine of “INTEREST” highlights:

• Core inflation, which excludes volatile food and energy prices, remained at 3.5% in June, while services inflation was unchanged at 5.7%.
• Swap rates dipped slightly following the results of July’s General Election, largely due to the certainty the election outcome offers after the pre-election period, which is often unsettled.
• For the first time in over three years, investors have seen a positive real return on their savings over the past couple of months.
• With CPI inflation remaining at 2% in June, the margin between savings rates and CPI moved closer to the Moneyfacts Rules of Thumb.
• The margin between CPI and mortgage rates increased to 3.80% over the month, the largest positive margin since September 2009 (3.96%).

‘INTEREST’ is dispatched in advance of meetings of The Bank of England’s Monetary Policy Committee and is distributed free of charge. To receive the latest issue and sign up please visit: https://moneyfactsgroup.co.uk/magazines-and-reports/interest/