Savers look set to lose billions over the next 12 months, if interest rates remain at their record low of 0.5 per cent, and inflation stays unchanged.
The figures come from campaigners Save Our Savers, as the Bank of England announced that interest rates would remain at 0.5 per cent for the 33rd successive month, meaning interest rates on savings will stay low too.
CPI inflation currently stands at 5.2 per cent, eroding the ‘real’ return on savings; and although Bank of England Governor Sir Mervyn King says this will come down in due course, Save Our Savers claims that the Bank of England’s inflation forecasts have been consistently wrong. Meanwhile, the value of sterling has fallen 25 per cent since 2007, adding upward pressure to inflation.
The research from Save Our Savers claims that if interest rates and inflation remain as they are for the next 12 months, savers, pensioners, and anyone on a fixed income, will suffer a net loss of £43billion.
Commenting, Simon Rose of Save Our Savers says: “If it was announced that £43 billion a year would be confiscated from those who are prudent and trying to save for their future to be given to the rash and imprudent who contributed to our current financial state, there would be uproar. But this is exactly what is happening, except that it is happening by stealth thanks to the Bank of England undermining the value of the pound.”