Money News
12th August 2008
Inflation warning for savers
Consumers have been alerted to the impact that soaring inflation could be having on their nest eggs.
Latest figures show that inflation during July leapt from 3.8 per cent to 4.4 per cent - the largest monthly jump recorded for over ten years.
Responding to the figures, Michelle Slade, an analyst at Moneyfacts.co.uk said that soaring prices will eat into returns offered by the majority of savings accounts.
She explained: "The most popular account with savers is a no notice account, where the average rate currently ranges between 3.3 per cent and 4.14 per cent before taxation, depending on the amount invested.
"In real terms, inflation is not only eroding returns on the investment, it is also depreciating the original capital invested."
Ms Slade added: "Savers need to make sure they review their existing arrangement and switch to best buy accounts paying rates higher than inflation."
The leap in inflation has been fuelled principally by soaring wholesale food prices, which has prompted a spike in customers' grocery bills.
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