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Savers are always on the lookout for the best interest rates and the UK seems like a good bet at the moment. In recent months, the pound has climbed in value against the euro and the dollar as economists speculate that UK interest rates will remain at 5.25% for longer than previously expected.
While the odds of a cut in borrowing have shortened, with a narrow majority of City analysts expecting a reduction, few outside the Square Mile believe a change is imminent.
If anything, Bank officials will send sterling to even greater heights when they signal, as seems likely, that a cut remains some way off.
Suren Thiru, economics director of accountancy body the ICAEW, says he still expects the Bank to lower interest rates to 4.75% by the end of the year, but “an August rate cut is looking less likely”.
Charlie Bean, an economist at the London School of Economics and a former deputy governor of the Bank, says he will be surprised if the cost of borrowing was reduced this week.
In March, the Bank’s nine-member monetary policy committee (MPC) said falling inflation and a weak outlook for the economy meant it was on course to lower interest rates. The committee signalled three rate cuts this year and more to come in 2025.