The Bank of England has today held the Base Rate at 3.75%, following its latest Monetary Policy Committee meeting.

The decision comes after new ONS figures showed UK CPI inflation rising to 3.1% in August, up from 2.9% in July. With inflation still above the Bank of England’s 2% target, the announcement is a useful reminder for savers, businesses and advisers to review where cash is held and whether it is still earning a competitive return.

With inflation still above the Bank of England’s 2% target, the outlook for interest rates remains uncertain. Whether the Bank of England Rate moves now or later, the latest inflation figures are a useful reminder that savers should continue to review where their cash is held.

Savings rates do not always move in line with the base rate, and different providers may adjust their products at different times. For savers, businesses and trustees holding larger cash balances, that means it is worth checking whether cash is still held in the right type of account, earning a competitive return and spread appropriately across providers.

A stable base rate does not mean savings rates stand still

It is a common mistake to assume that when the base rate remains unchanged, there is no action to take. In reality, the cash savings market is highly dynamic. Banks and building societies do not react to central bank decisions in the same way or at the same speed.

Competition between providers, varying institutional funding requirements, and individual commercial strategies mean that some banks will begin adjusting their savings yields in anticipation of future movements. This creates a disparity between the best and worst rates on the market. For individuals, businesses, and trustees holding larger cash balances, these marginal differences can have a dramatic impact on total returns over time.

Why savers should use this moment to review their options

In a changing rate environment, it can be useful to review whether cash is still held in the right products. Some savings may need to remain easy to access, while other balances may be suitable for notice or fixed-rate accounts, depending on individual needs.

By using a cash management platform like Akoni, savers can access a range of notice and fixed-term savings products from a panel of partner banks. Rather than opening and managing multiple banking relationships separately, users can compare options and manage deposits through one platform.

“Akoni can also help savers spread deposits across different institutions, which may support use of available FSCS protection limits, subject to eligibility.”

Four questions to ask yourself today:

1. Are my cash holdings earning a competitive, inflation-beating return that outpaces the newly accelerated 3.1% inflation rate?

2. Is my money spread appropriately across different and have I considered how FSCS protection limits may apply?

3. Am I holding too much cash in low or no-interest accounts when other savings options may be available?

4. If I am managing corporate, charity, or trust funds, when did we last review our cash savings options?

These questions are always important, but they carry significantly more weight in a market that is actively signalling impending changes.

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