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Bank of England sees depositors lap up low savings rates
Savers are ploughing ever more money into savings accounts despite falling interest rates, Bank of England figures show today.
Interest rates are falling ever closer to the Bank’s 0.5 per cent base rate.
The blue bars on this chart show rates edged up a touch in the second quarter of 2014, but the red line shows banks expect yet another fall in the coming three-month period.
The next chart shows deposit volumes still rising – that is, despite falling rates, savers are putting more cash into banks.
Savers may be reluctant to try riskier assets like shares and so keep money in bank accounts despite losing out against inflation.
But the Bank is attributing the latest increase to a change in government policies – the new ISA limit at £15,000 across either cash or stocks and shares accounts, encouraging more tax-free saving.