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Just 11 of 661 inflation-beating savings accounts offered by big banks

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just 11 of 661 inflation beating savings accounts offered by big banks

The low savings rates on offer from Britain’s biggest banks have been laid bare even more today, thanks to a sharp fall in the consumer prices index.

Hundreds of accounts now beat inflation after CPI fell to its lowest level in five years in August, at 0.2 per cent.  

Overall, just 11 accounts offered by Barclays, HSBC, Lloyds, Nationwide Building Society, NatWest, Santander and TSB pay at least August’s consumer prices index reading of 0.2 per cent, a fraction of the 661 inflation-matching accounts available overall.

These include fixed-rates, cash Isas and notice accounts.  

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Just 11 accounts offered by Britain’s biggest banks pay at least 0.2% and match the low rate of inflation

Additionally, of the 87 bread and butter easy-access savings accounts currently paying at least 0.2 per cent, just one, from Nationwide which restricts savers to three withdrawals a year, is offered by Britain’s biggest high street names.

Britain’s five biggest banks Barclays, HSBC, Lloyds, NatWest and Santander have all paid as little as £1 interest on £10,000 of savings since the end of July, slashing deposit rates to close to nothing on the back of a record low Bank of England base rate.

Experts have continuously warned savers to move the billions of pounds they hold with Britain’s biggest banks away from the high street to earn greater returns on their money and potentially stimulate competition. 

Figures from Moneyfacts show that fewer than half-a-dozen accounts available on the high street match or beat last month’s inflation reading, which at 0.2 per cent hit its lowest level since December 2015.

The Office for National Statistics found CPI, which has fluctuated in recent months and surprisingly increased to 1 per cent in July, fell in August largely on the back of falling restaurant prices due to the Government’s Eat Out to Help Out discount scheme and a cut in VAT.

The cost of plane tickets also fell in August for the first time on record as fewer people travelled abroad, the ONS said.

Britain’s biggest banks short change savers 
  Number of inflation-matching easy-access accounts  Number of inflation-matching accounts in total 
Seven high street banks 1 11 
All banks  87  661 
Source: Moneyfacts 
The Consumer Prices Index measure of inflation stood at just 0.2% in August after the government's Eat Out to Help Out scheme pushed down restaurant prices

The Consumer Prices Index measure of inflation stood at just 0.2% in August after the government’s Eat Out to Help Out scheme pushed down restaurant prices 

And with inflation so low, even the small number of accounts from Britain’s biggest banks which do currently match or beat the CPI can be topped elsewhere if savers switch. 

The vast majority of the 845 savings accounts available currently beat the CPI.

Nationwide’s 0.25 per cent Triple Access Online saver, the only easy-access account offered by the big seven which pays 0.2 per cent or more, compares to a top rate of 1.2 per cent offered by Skipton Building Society.

This is a difference of £95 a year on £10,000 of savings.

And while Barclays, HSBC and Nationwide all offer a one-year fixed-rate bond paying 0.3 per cent, this compares to the 1.25 per cent savers can earn with Secure Trust Bank, the best rate available on the market.

Analysts also predicted that inflation could be set to rise from the start of next year, making it especially important for savers to earn as much as they possibly can.

When it was announced last month that inflation surprisingly rose to 1 per cent in July, just 91 accounts paid that much, an 80 per cent fall on the month before, highlighting how savings rates remain low despite something of a recent recovery.

This is Money reported at the end of July how savings in the first six months of this year swelled the deposits of Barclays by 10 per cent, or £20.2billion, and of Santander by £6billion, despite the two big banks paying savers little in return. 

Meanwhile, Andrew Davis, commercial director at TSB recently said it was ‘a great fallacy’ that the interest paid on savings was important to customers, describing them as only ‘the icing on the cake’. 

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Retail sales rise for fourth month as economy shows signs of recovery

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retail sales rise for fourth month as economy shows signs of recovery

Households continued to splash out last month as the economy showed signs of recovery after lockdown.

Retail sales rose by 0.8 per cent in August, according to the Office for National Statistics, putting them 4 per cent above pre-pandemic levels.

It was the fourth month of rising sales in a row – boosted by demand for DIY products and other household goods.

Retail sales rose by 0.8 per cent in August, according to the Office for National Statistics, putting them 4 per cent above pre-pandemic levels

Retail sales rose by 0.8 per cent in August, according to the Office for National Statistics, putting them 4 per cent above pre-pandemic levels

Retail sales rose by 0.8 per cent in August, according to the Office for National Statistics, putting them 4 per cent above pre-pandemic levels 

But Jonathan Athow, deputy national statistician for economic statistics at the ONS, said: ‘Overall, the switch to greater online sales means the High Street remains under pressure.’

The ONS report showed that online sales are 46.8 per cent up since February.

There has also been strong demand for household goods – up 9.9 per cent since February – as families carried out home improvements.

With fresh restrictions across England being considered again, industry figures yesterday warned they could be in for more pain.

Helen Dickinson, chief executive of the British Retail Consortium, said retailers were in ‘a period of fragile recovery’.

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Shares tank on fears of another lockdown within weeks

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shares tank on fears of another lockdown within weeks

Shares in companies that would suffer in a second lockdown plunged as ministers warned ‘circuit-break’ restrictions could come into force within weeks.

Firms in every corner of the economy were hit by the warnings with airlines, engineering groups and banks leading the fallers.

Prime Minister Boris Johnson said the UK was ‘seeing the start of a second wave’ of the pandemic as another 4,322 coronavirus cases and 27 deaths were reported in the UK.

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33354086 8748953 image m 18 1600458890631

Warning: Prime Minister Boris Johnson said the UK was ‘seeing the start of a second wave’ of the pandemic as another 4,322 coronavirus cases and 27 deaths were reported in the UK

The Government is now considering a partial ‘circuit-break’ lockdown for two or more weeks across the whole of England, which could include asking some hospitality businesses to close and limiting the opening hours of some pubs and restaurants nationwide. 

But business leaders have warned that another lockdown could ‘cripple’ the already-fragile economy just as it has started to recover.

Hannah Essex, co-executive director of the British Chambers of Commerce, said: ‘While protection of public health must be the priority, government should do everything in its power to avoid further national lockdowns that will cripple businesses.’

Ryanair grounds flights 

Ryanair will further reduce its operations due to coronavirus travel restrictions.

The budget airline said its capacity in October will be 40 per cent of 2019 levels, compared with the 50 per cent it previously announced. 

The firm said it expects to fill 70pc of seats on its planes. A Ryanair spokesman said: ‘While it is too early yet to make final decisions on our winter schedule (from November to March), if current trends and EU governments’ mismanagement of the return of air travel and normal economic activity continue, then similar capacity cuts may be required across the winter period.’

It is thought the restrictions will come in over the half-term break – which would dash any hopes of an autumn holiday for families.

It would also threaten weakening consumer confidence even further at a time when the economy was getting back to normality.

Shares in British Airways-owner IAG plunged 14.6 per cent, or 18.9p, to 110.55p, making it the largest faller on the FTSE 100 index.

Holiday Inn-owner Intercontinental Hotels Group tumbled 4.5 per cent, or 194p, to 4137p, while Premier Inn-owner Whitbread slid 2.4 per cent, or 53p, to 2200p.

On the FTSE 250 Easyjet slumped 9.2 per cent, or 54.6p, to 539.6p, while cruise operator Carnival sank a further 7.9 per cent, or 81.4p, to 947.6p. 

Travel and tourism companies have been among the hardest hit in the crisis after the pandemic brought global air travel virtually to a standstill through spring and the early summer. 

Airlines were further pummelled by confusing and last-minute quarantines being imposed on many popular summer holiday destinations – and are now having to row back their tentative autumn schedules even further.

Russ Mould, investment director at AJ Bell, said: ‘The Government wants to avoid economic disruption, but clearly a return to tighter lockdown measures next month would disrupt businesses and put further pressure on jobs.’

Shares in British Airways-owner IAG plunged 14.6 per cent, or 18.9p, to 110.55p, making it the largest faller on the FTSE 100 index

Shares in British Airways-owner IAG plunged 14.6 per cent, or 18.9p, to 110.55p, making it the largest faller on the FTSE 100 index

Shares in British Airways-owner IAG plunged 14.6 per cent, or 18.9p, to 110.55p, making it the largest faller on the FTSE 100 index

Engineering groups that supply airlines with parts and engines were also put under pressure.

Shares at Rolls-Royce dived 5.1 per cent, or 9.75p, to 180.15p, while GKN-owner Melrose fell 3.4 per cent, or 4.25p, to 120p.

Michael Hewson, chief market analyst at CMC Markets UK, said: ‘The continued reduction by airlines to their flight schedules puts more pressure on Rolls-Royce’s cash flow as they get paid in line with how much time aircraft are actually in the air.’

Kate Nicholls, the boss of UK Hospitality, said the sector was still on a ‘knife edge’.

Wagamama-owner The Restaurant Group lost 2.4 per cent, or 1.35p, to close at 54.65p, while train station and airport café operator SSP fell 3.1 per cent, or 6.2p, to 196.2p.

There was further pressure on banks after traders were spooked this week by talk of negative interest rates. Fears are rising that negative interest rates might be one of the only policy tools left in politicians’ arsenals to fight Covid.

HSBC ended down 2.2 per cent, or 6.8p, at 304p last night, while Lloyds fell 3.9 per cent, or 1.01p, to 25.24p, and Natwest fell 3.2 per cent, or 3.17p, at 96.88p.

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Covid-hit Gemfields plunges to £50m loss

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covid hit gemfields plunges to 50m loss

Gemfields swung to a loss as Covid-19 shut its mines and cancelled crucial gem auctions.

The Faberge owner and precious stones miner, which has counted celebrities such as actor Mila Kunis (pictured) among its celebrity ambassadors, said turnover had tumbled 83 per cent to £16million in the first six months of the year. 

And the ruby and emerald specialist racked up a loss of £50.1million, down from a profit of £16million in the same period of last year. 

Sales slump: Faberge-owner Gemfields, which has counted celebrities such as actor Mila Kunis (pictured) among its celebrity ambassadors, said turnover had tumbled 83 per cent

Sales slump: Faberge-owner Gemfields, which has counted celebrities such as actor Mila Kunis (pictured) among its celebrity ambassadors, said turnover had tumbled 83 per cent

Sales slump: Faberge-owner Gemfields, which has counted celebrities such as actor Mila Kunis (pictured) among its celebrity ambassadors, said turnover had tumbled 83 per cent

Between January and June it only managed to hold one gemstone auction, in Zambia, where it raised £9million selling emeralds. 

It is trying to arrange online auctions but is not sure when this will be up and running. And it has scrapped financial guidance as a result of the pandemic’s hit.

The company has been forced to write down the value of its Faberge arm by £9million, after seeing a ‘significant reduction’ in sales as well as a ‘less positive outlook on the global luxury goods and retail sectors’.

The torrid six months included rejoining the London Stock Exchange’s junior market on Valentine’s Day.

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