Policymakers are in a stalemate. Growth has seized up, but inflation has stayed stubbornly sticky.
Trade deals have cleared some economic clouds, but conflict in the Middle East threatens further turmoil.
Energy prices looked like they were on their way down, but are now ramping back up.
The labour market has shown signs of easing, but not enough to erase worries about hot wage growth.
In every direction, there’s a conundrum to confront, so policymakers have judged that pressing the pause button on rates once more is the best option for now.
Given the unpredictable winds whistling through the world, global growth is set to slow, keeping activity in the UK highly sluggish.
However, the economy will need a shove to get moving again, so two interest rate cuts are still on the horizon this year.
Hopes for a summer rate reduction haven’t completely faded, with markets suggesting we could still see a cut in August, providing the rays of relief that borrowers have been waiting for.
This article isn’t personal advice. Unlike the security offered by cash, investments can rise and fall in value, so you could get back less than you invest. Ask for advice if you’re not sure what’s right for you.
What’s next for savers?
Savings rates are likely to hold relatively firm.
Variable rates owe a lot to the Bank of England, so a hold means less movement in the market.
Fixed rates, meanwhile, are being pulled in two different directions, so lack of movement here hides the fact there’s a lot going on.
With markets still expecting two more rate cuts this year, all other things being equal this would put downwards pressure on savings rates.
However, at the same time, the bond market is busy putting upwards pressure on savings rates.
It means little movement in the savings market, with small tweaks in one direction or the other.
It also makes forecasting harder.
An awful lot depends on global politics, which has proven incredibly difficult to predict in recent months.
What should savers do?
Instead of trying to second-guess global political developments, it makes sense to pick the right type of savings account for your needs and checking online banks and savings platforms for the best possible deals.
An online savings platform, like Active Savings, means you can switch banks to find better rates all in one place, without spending lots of time shopping around yourself. Bear in mind that rates are added and withdrawn at any time.
Active Savings brings some great rates on the market from over 20 banking partners through one easy-to-use online account.
It also offers long and short-term fixed rates, as well as easy-access products.
Remember though, fixed-term products generally only allow access to your cash at maturity. Withdrawals from easy-access accounts usually take up to one working day.
What’s next for mortgage rates?
You only have to look at recent moves in the mortgage market to see how tough the banks are finding it to price their deals right now.
We’ve seen some banks cut rates, some increase them, and some do a combination of both.
You’d be forgiven for thinking the Bank of England holding rates might bring some stability, but while that’s true for tracker rates, fixed-rate deals are another matter entirely.
They’re facing a strange combination of factors, with expected rate cuts pointing to a future of lower rates, and rising bond yields raising the cost of fixed deals and pushing rates up.
Neither of these things look set to change in a hurry, so we might need to get used to uncertainty for a while.
However, at times like this, we’ll also get some low rates in the mix every so often, so it’s important to keep an eye open for any opportunities as soon as they appear.
The Active Savings service is provided by Hargreaves Lansdown Savings Limited (company number 8355960). Hargreaves Lansdown Savings Limited is authorised by the Financial Conduct Authority under the Electronic Money Regulations 2011 with firm reference 901007 for the issuing of electronic money.
Hargreaves Lansdown Asset Management Limited and Hargreaves Lansdown Savings Limited are subsidiaries of Hargreaves Lansdown plc (company number 2122142).
