We are one step closer to potentially seeing a rise in interest rates since the pandemic first began; with Andrew Bailey announcing that the Bank of England is ready to do so, to fight inflation with this possibly happening before Christmas.
For many, this does not come as a surprise, as inflation is surging at a rapid pace with no sign of slowing anytime soon, especially in the run up to Christmas, which historically brings about increased spending, higher demand for food and travel and subsequent inflationary pressure on food and petrol prices. With this being said, the Bank of England has hinted at increased borrowing in 2022 as a more realistic approach, and they hope inflation can be controlled, even with Christmas approaching.
On the 23rd September, the MPC voted to hold the current interest rate of 0.25% and to continue its quantitative easing method; the economy is still fragile - in August, there were more people on furlough than previously thought and with this rescue package stopping at the end of September, this will inevitably plunge many more individuals further into debt.
So, what can we expect between now and December?
Although the economic situation remains tumultuous, Andrew Bailey used an analogy of the bridge in his ‘The Hard Yards’ speech, to explain that the economy was still grappling with the lingering effects of Covid and had not yet made it out to the other side. This is due to a number of issues slowing the rate of recovery. In addition to supply and demand issues caused by lockdown, the transition after Britain's exit from the EU has meant labour shortages and supply chain issues are harder to address.
According to The Guardian, chief economist at the consultancy Pantheon Macroeconomics, Samuel Tombs, states that “Our sense from the speech is that Mr Bailey leans slightly dovishly and is not going to rush to hike [interest rates], unless the case is overwhelmingly strong,”, suggesting the current state of positive fluctuating rates will be set to continue.
Mr Bailey also addresses the current problems arising in the labour market, admitting that it is unsteady and unpredictable, but is likely to level out shortly.
To conclude, the MPC are closely keeping an eye on inflation and are ready to ‘step in and adjust monetary policy as needed’.
So, why should you choose Akoni to help you with your client’s cash decisions?
1) Safe and secure with the FSCS Government deposit guarantee
All deposits are held with each bank providing protection of up to £85,000 per bank, or up to £1 million for Temporary High balances.
2) Diversifying risk (spreading money across savings providers)
With the option to spread cash across several providers on the Akoni Cash Management Platform, you can diversify risk, and increase the chances of positive returns.
3) Increased returns & Better interest rates
In a climate of economic uncertainty, and with interest rates being cut across many providers, it’s not easy to find decent interest rates in a simple way. With Akoni, you can find competitive interest rates to suit your client’s specific needs.
4) Quicker, and hassle-free - no form filling
Akoni Hub provides a hassle-free cash management experience - your clients can onboard and open an account online with no fuss. Clients will only need to complete one AML/KYC process, can switch between providers, and manage their account on the Akoni Cash Management Platform in just a few clicks.
5) White label Adviser portal and tools
You have the flexibility to create a platform that works for you and your clients. Add your branding to showcase who you are through a sleek, professional cash management platform designed with you in mind.
The award-winning Akoni Cash Management Platform is already leading the way in the wealth management sector, and has partnerships with Barclays, Aldermore, Investec, Clydesdale, amongst others. The ability to white label the platform gives financial advisors flexibility to help their clients move cash depending on ever-changing macro and micro environmental factors.
Find out more about Akoni: Akoni is an award-winning UK cash platform, which provides a marketplace to financial advisors and wealth managers through a bespoke white-label offering, or off-the-shelf offering. Akoni uses innovative technology to personalise cash planning solutions for clients, and also provides a full API solution to banks and insurance clients.