Interest rate outlook may please borrowers but is bad news for savers

Low interest rates may be good news for borrowers. But the outlook for rates now poses a considerable dilemma for savers.

6th August, 2005

Do they satisfy themselves with, at best, 2-3 per cent rates broadly in line with inflation, or do they opt to take the risk of plunging into the equity and property markets and hope that the extra returns justifies the additional cost?

It is, of course, an improvement on the high inflation ‘old days',when galloping price increases typically eroded the value of savings in the bank. A deposit rate of 4-5 per cent may seem...

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