Post by account_disabled on Mar 10, 2024 22:25:57 GMT -5
Households withdrew a record number from banks and building societies last month, suggesting more consumers are looking elsewhere for higher interest rates and tapping into their savings to maintain living standards amid high inflation. Data released by the Bank of England on Thursday showed households withdrew a net £4.6 billion from banks and building societies in May, the highest level of withdrawals since monthly records began in 1997. The record figure was boosted by a jump to £11.4bn of net withdrawals from interest-bearing accounts, which can be accessed without penalty and which generally have a variable rate. Meanwhile, net withdrawals from non-interest-bearing accounts were, marking the seventh month in a row that customers have withdrawn more than they deposited.
The data comes as households grapple with the stubbornly high rate of price growth, which stood at 8.7% in May, and banks come under greater pressure to pass on rising interest rates to savers. BoE figures showed the Russia Mobile Number List effective rate on instant access accounts fell 8 basis points to 1.33 percent in May. That is considerably behind both the central bank's benchmark rate, now at a 15-year high of 5 per cent, and rates for two-year fixed mortgage deals, which are above 6 per cent. In its latest report, the BoE Monetary Policy Committee noted that “the pass-through [of higher interest rates]” to these accounts had “been unusually weak” since it began raising the bank rate in December. You are viewing a snapshot of an interactive chart.
This is most likely because you are offline or JavaScript is disabled in your browser. Ashley Webb, a British economist at the consultancy Capital Economics, attributed part of the fall to "people moving money into other investments outside the banking sector, such as British gilts." But she added: “Households' pandemic savings may be running out to support spending.” UK 10-year gilt yields are around 4.3%, up from 3.3% in March, while two-year government bonds are yielding 5.2%, up from 3.2% in March, reflecting the change in interest outlook. rates Daniel Mahoney, UK economist at Handelsbanken, said the record £4.6bn figure provided “strong evidence” that people were “digging into excess savings built up during the pandemic to maintain living standards” amid of the reduction in the cost of living.
The data comes as households grapple with the stubbornly high rate of price growth, which stood at 8.7% in May, and banks come under greater pressure to pass on rising interest rates to savers. BoE figures showed the Russia Mobile Number List effective rate on instant access accounts fell 8 basis points to 1.33 percent in May. That is considerably behind both the central bank's benchmark rate, now at a 15-year high of 5 per cent, and rates for two-year fixed mortgage deals, which are above 6 per cent. In its latest report, the BoE Monetary Policy Committee noted that “the pass-through [of higher interest rates]” to these accounts had “been unusually weak” since it began raising the bank rate in December. You are viewing a snapshot of an interactive chart.
This is most likely because you are offline or JavaScript is disabled in your browser. Ashley Webb, a British economist at the consultancy Capital Economics, attributed part of the fall to "people moving money into other investments outside the banking sector, such as British gilts." But she added: “Households' pandemic savings may be running out to support spending.” UK 10-year gilt yields are around 4.3%, up from 3.3% in March, while two-year government bonds are yielding 5.2%, up from 3.2% in March, reflecting the change in interest outlook. rates Daniel Mahoney, UK economist at Handelsbanken, said the record £4.6bn figure provided “strong evidence” that people were “digging into excess savings built up during the pandemic to maintain living standards” amid of the reduction in the cost of living.