Abbey international sees high interest rates remaining

Most commentators agree that with CPI rising prices above the Government's target of 2%, the electric current UK Base Rate of 5% is unlikely to be reduced in the short term.
info in the subject Statistics business office report showed upward inflationary pressures were felt from a range of goods and services including food and energy prices. Nevertheless, the rate of addition in the broader retail terms index was lower, as this benefited from the decrease in mortgage interest costs passed on by banks after the last UK Base Rate cut in April. Mortgage interest costs are not included in the CPI index. The Bank of England is obviously still concerned about the prospects for rising prices in the UK and sees a possibility of CPI reach 4% later this year, according to a missive written by the Governor to the UK premier. With crude oil terms hovering about the $140 per gun barrel mark, this too, will add unwanted inflationary pressures as motor fuel and domestic help electricity and gas costs are all included in the handbasket of goods used to calculate the rate of rising prices.

Commenting on the prospects for UK Base Rate alteration, Nick McPhail, Treasury director, Abbey International said, "It now seems unlikely that the UK Base Rate will be reduced in the short term, unless inflationary pressures retreat more rapidly than is prognosis, so for offshore savers, this could mean the electric current period of higher than norm savings rates remains."

Jane Matthews, Head of selling & concern Development at Abbey International said: "We have late launched a range of fixed rate contracts offering returns of 7% gross over 3 months. This is a full 2% over UK Base Rate, but savers can also lock into rates 1.25% above UK Base Rate on 12 month deposits, so for savers looking for the combination of attractive guaranteed savings rates and the backing of one of the largest group in Europe, this is a good time to act."
Abbey International offers a range of savings accounts in sterling, euros and US dollars and all accounts have simple, transparent interest rate structure. Abbey International's internet service enables accounts to be operated easily from anywhere in the world 24/7.
 
For further information on offshore call + 44 (0)1534 885000 or log onto www.abbeyinternational.com