The Bank of England has cut the interest rate from 5% to 4.75%, the second rate cut this year.
Inflation has been falling to the Bank of England’s target of 2%, with the 12 months to September seeing an inflation rate of 1.7%.
Inflation is the cost of things (like food) going up over time, and the Bank of England’s target is to keep this at 2%, which it does by increasing or decreasing their interest rate.
This is the rate banks get when they deposit their money with the Bank of England, and so it has a knock on effect for things that banks, and other financial companies, give you, such as savings accounts and mortgages (check out our mortgage comparison tool for all the latest rates).
So, it’s good news for those borrowing money (mortgages and loans should become cheaper), but not great news for your savings, which will likely see a lower interest rate in the coming days (if the interest rate isn’t fixed for a period of time). Here’s the best savings accounts to check you’re getting a top rate.
Nuts About Money tip: if your mortgage is coming up for renewal soon, check out our list of the best mortgage brokers to ensure you get the best deal out there for you, you could save a small fortune.
