Bank of England governor Mark Carney has revealed an interest base rate rise is nudging closer as the economy improves.
He explained that the decision is based on a formula taking into account unemployment and the cost of living.
The base rate is likely to climb from 0.5% when the UK jobless rate slips below 5% while the consumer price index measure of inflation remains below 2%.
The current unemployment rate is 6.5% and falling, but still has some way to go before hitting the base rate trigger.
CPI inflation is down to 1.6% for July 2014 – a fall of 0.3% from the month before.
“Indicators show the economy is stabilising at normal levels, so the time when interest rates have to return to a normal level is approaching ever faster,” said Carney.
“We have no date marked on the calendar; the date of the increase will depend on how other data lines up.
Eurozone disappointment
“They won’t leap up, but we expect a gradual increase keeping pace with the cost of living and the unemployment rate.”
Meanwhile, the euro had plunged against the pound and dollar with the news that the European central Bank has cut headline interest rates to 0.05%, while slicing more off the savings rate to -0.2pc.
Annual Eurozone inflation was 0.3% in August, well below the ECB’s target of just below 2%.
ECB president Mario Draghi was expected to announce a quantitative easing program on the lines of those seen in Britain and the US, but instead he stopped short at indicating that bond buying would start next month.
However, Draghi did not go into details of how much cash the ECB would pump into the flagging Eurozone economy.
Offshore savings rates remained unchanged in the face of uncertainty over rate changes.
| Offshore Fixed Term Savings Accounts - by interest rate | |||
|---|---|---|---|
| Provider | AER | Term | Deposit |
| Conister Bank | 3.75% | 5 Year Bond | £5,000 |
| Skipton International | 2.75% | 5 year Bond | £10,000 |
| Conister Bank | 2.75% | 3 Year Bond | £5,000 |
| Nationwide | 2.30% | 3 Year Bond | £5,000 |
| Skipton International | 2.25% | 3 Year Bond | £10,000 |
| Conister Bank | 2.25% | 2 Year Bond | £5,000 |
| Permanent Bank | 2.11% | 5 Year Bond | £20,000 |
| Permanent Bank | 2.06% | 3 Year Bond | £20,000 |
| Santander | 2.05% | 3 Year Bond | £200,000 |
| Permanent Bank | 2.03% | 2 Year Bond | £20,000 |
| Conister Bank | 2.00% | 1 Year Bond | £5,000 |
| Permanent Bank | 1.99% | 18 Month Bond | £20,000 |
| Permanent Bank | 1.84% | 15 Month Bond | £20,000 |
| Leeds Building Society | 1.50% | 1 Year Bond | £1,000 |
| Newcastle Building Society | 1.50% | January 22, 2016 | £500 |
| Permanent Bank | 1.50% | 1 Year Bond | £20,000 |
| Santander | 1.50% | October 1, 2016 | £200,000 |
| Nationwide | 1.45% | 1 Year Bond | £50,000 |
| Newcastle Building Society | 1.40% | January 22, 2015 | £500 |
| Nationwide | 1.36% | 6 Month Bond | £50,000 |
| Offshore Fixed Term Savings Accounts - by deposit amount | |||
| Provider | AER | Term | Deposit |
| Newcastle Building Society | 1.50% | January 22, 2016 | £500 |
| Newcastle Building Society | 1.40% | January 22, 2015 | £500 |
| Leeds Building Society | 1.50% | 1 Year Bond | £1,000 |
| Conister Bank | 3.75% | 5 Year Bond | £5,000 |
| Conister Bank | 2.75% | 3 Year Bond | £5,000 |
| Conister Bank | 2.25% | 2 Year Bond | £5,000 |
| Conister Bank | 2.00% | 1 Year Bond | £5,000 |
| Skipton International | 2.75% | 5 year Bond | £10,000 |
| Skipton International | 2.25% | 3 Year Bond | £10,000 |
| Permanent Bank | 2.11% | 5 Year Bond | £20,000 |
| Permanent Bank | 2.06% | 3 Year Bond | £20,000 |
| Permanent Bank | 2.03% | 2 Year Bond | £20,000 |
| Permanent Bank | 1.99% | 18 Month Bond | £20,000 |
| Permanent Bank | 1.84% | 15 Month Bond | £20,000 |
| Permanent Bank | 1.50% | 1 Year Bond | £20,000 |
| Nationwide | 2.30% | 3 Year Bond | £50,000 |
| Nationwide | 1.36% | 6 Month Bond | £50,000 |
| Nationwide | 1.45% | 1 Year Bond | £50,000 |
| Santander | 2.05% | 3 Year Bond | £200,000 |
| Santander | 1.50% | 2 Year Bond | £200,000 |
| This list covers most major providers but is not exhaustive. Account rates and minimum deposits are likely to change or be withdrawn at short notice. Some minimum deposits are 'open with' amounts and are scaled up to the headline rates with a bonus or increased deposit amount. | |||
Offshore savings providers
Here’s a list of 10 of the leading offshore savings providers with links to their web sites:
- Conister Bank – Private personal and commercial banking from the Isle of Man
- Investec – Offers international banking services, including savings and investments from the Channel Islands
- Leeds Building Society – Gibraltar branch of the UK based building society serving expats
- Lloyds Bank International – Channel Islands and Isle of Man personal banking for expats
- NatWest Bank – Offshore saving rates from branches in Gibraltar, the Isle of Man and Channel Islands
- Nationwide Building Society – The international service of the popular UK building society
- Newcastle Building Society – Expat saving and banking services from Gibraltar
- Permanent Bank – Isle of Man branch of an Irish-based bank
- Santander – Isle of Man branch of this international bank with a UK high street presence
- Skipton International – Channel Islands branch for expats of the UK building society
Other offshore financial institutions are available and will be added to the list when they issue new products for expat savers.
