Social Investment Scotland support for Leith credit union
CASTLE Community Bank, based in Leith, has received £1 million investment from Social Investment Scotland.
The credit union received the £1M sub-ordinated loan to support their growth and ambition to be a ‘business of scale’, providing ethical and affordable loans and excellent returns for savers.
Castle Community Bank Chief Executive Adrian Sargent said: “I’m delighted that Social Investment Scotland has confidence in Castle Community Bank and has invested £1 million.
“This fantastic investment will reap benefits for not only our organisation but also the communities and members we support in Leith and beyond. This is another important step in our journey to grow the credit union sector and promote financial inclusion in the UK.”
Social Investment Scotland Head of Investments Chris Jamieson, said: “We’re very happy to be supporting Castle Community Bank and its ambitious programme of targeted growth, which will positively impact people in Leith and the surrounding area.
“We see the important role that credit unions play in building a wellbeing economy, particularly when many individuals and households are struggling with the rising cost of living.
“That’s why we are committed to supporting organisations such as Castle Community Bank, who are providing fair and affordable access to finance for the people and communities who need it most.”
Brits have on average £24,500 in savings account, after putting away £260 every month
UK savers say that their average interest rate is 3.3%, 1.95% below the Bank of England’s rate
Despite this, only 23% of savers have switched accounts in the last year to capitalise on better interest rates
7 out of 10 brits (71%) feel that banks profits are too high
Smart money app Plum is calling out banks for profiteering from high interest rates and not passing interest back onto savers.
Despite recent hikes in the Bank of England’s base interest rate, which currently stands at 5.25%, many UK banks have been slow to adjust their savings account rates accordingly. This has left consumers feeling short changed and struggling to make the most of their money.
New research from Plum shows that the average UK saver is putting away £260 in savings each month, with a total of £24,500 in their savings accounts. In addition, the research found that the average Brit is getting 3.3% interest on their savings account, 1.95% under the base rate. This means that on average, customers are losing out on £478 in interest per year1, equating to a hefty £17 billion across UK savers2.
Despite savers being able to gain higher interest rates by switching, the majority of savers (77%) hadn’t done this. They cited similar rates between banks (28%) and liking their current banks (30%) as the biggest barriers, even though 71% of people felt that banks profits were too high.
The biggest motivator for saving was for an emergency fund (49%), with holidays coming in second (44%). Saving up to buy a house or for home improvements was the biggest motivator for people under 45 (47%) and for the 55-64 age bracket, saving for retirement was their biggest priority (51%).
In July this year, the FCA set out a 14-point action plan to ensure banks and building societies are passing on interest rate rises to savers appropriately, with those that fail to justify their pricing decisions by the end of 2023 set to face robust action from the FCA.
Victor Trokoudes, Founder and CEO of Plum, said: “While banks have been quick to increase interest rates on loans and mortgages, they have been sluggish in boosting interest rates on savings accounts.
“We are in the midst of a cost-of-living-crisis and consumers are continuing to face financial pressures. So it’s really disappointing to see that many banks are not passing more of this money back onto customers, effectively devaluing their hard earned savings.
“While the FCA has pledged to take action against this behaviour by the end of 2023, it’s by no means a silver bullet. Borrowers are paying more while savers see minimal benefits, highlighting that the business models of the major banks are inherently misaligned with the interests of their customers.
“The Bank of England has raised rates 14 times since December 2021, and they are expected to remain high. That’s why it’s so important that the public know that they don’t need to stand for this and allow banks to take their deposits for granted. We’ll be offering a new service that better reflects these base rate changes so their money can work harder.”
Plum, which has already helped people to set aside £2bn, is launching a new product that allows people to earn higher returns that are more closely aligned to the Bank of England base rate
Male pension pots are two thirds larger than women’s on average
Only 23% of women are confident they will be able to retire comfortably
Fewer women than men have pensions, and those who do are saving less than their male counterparts, reveals independent research conducted on behalf of Handelsbanken Wealth & Asset Management.
Handelsbanken Wealth & Asset Management’s report,Can we solve the gender wealth gap? highlights the disparity in retirement savings between men and women, revealing that over a fifth (26%) of women have no formal pension savings at all, compared to just 16% of men.
Women’s pension pots were found to be substantially smaller too. The average pension across amounts for all respondents stood at £103,037. However, male respondents’ pension pots were found to be significantly higher, averaging at £142,234, while women’s came in at just over a third of this, at an average of £51,384.
It is therefore unsurprising that only 23% of women surveyed stated they are confident that they will be able to retire comfortably, with over a third (35%) believing they won’t be able to.
However, there are signs that things could be turning around for the next generation. While women over the age of 40 are generally less likely to have a pension than men of a similar age (63% vs 80%), men and women in their 30s were found to be equally likely to have a pension (77%). For adults under 30, women were found to be more likely to have a pension than men (76% vs 59%).
The research also revealed that most people tend to leave the management of their pension to their workplace pension provider (45%). Men were slightly more likely than women (43% versus 37%) to manage their own pensions, such as via a self-invested personal pension scheme (SIPP).
However, more than half (56%) of those who self-manage their pensions admitted that they seldom check their retirement savings – of which 64% were female.
Christine Ross, Head of Private Office (North) & Client Director at Handelsbanken Wealth & Asset Management, said: “Women on average continue to remain a long way behind men in pension savings, with the problem at its most acute among older generations who are closer to retirement.
After decades of gender disparity, it’s encouraging to finally see clear evidence of change, with pension take up reaching parity among thirtysomethings, and women in their twenties ahead of their male counterparts.
The recent steps taken at a government level have the potential to further close the gender pensions gap, including the free childcare scheme expansion announced at the Spring Budget, which should allow more working mothers to return to the workplace and build their pension savings.
“But despite signs of progress, there is still considerable work to be done. Education around pensions needs to be improved, as does women’s confidence in financial products. We strongly encourage seeking advice on long-term financial planning where possible, to ensure that the plans you have in place are fit for purpose on an ongoing basis.
“Generally, it is important to review your pension regularly and to top up your workplace pensions where possible. If you’re unable to pay into a formal pension, there are plenty of other options to consider, including ISAs, which offer tax-free savings.”
Edinburgh parents urged to seek help with employment
A new campaign will encourage families living on a low income to access local support with finances and work.
It encourages people to take the first step towards relieving these pressures with help from the Parent Club website. This can guide them towards tailored support to help them improve their situation by starting work after unemployment, returning to work or improving earnings.
The campaign which includes TV, radio and online advertising, highlights the pressures of everyday life and shows parents feeling the ‘walls closing in’ on them as they juggle family life with bills and other costs.
Cllr Joan Griffiths, Education, Children and Families Convener for the City of Edinburgh Council, said: “We know that many families in Edinburgh are finding it hard to make ends meet at the moment and are looking for advice on things like finding work and applying for benefits.
“Taking the first step at ParentClub.scot can help find services that offer free, confidential and tailored advice that can really make a difference for families across Scotland.
“For anyone that’s feeling worried, stressed and overwhelmed, but aren’t sure where to start, please know you’re not alone and that help is available.”
Social Justice Secretary Shona Robison said: “We understand the anxiety and stress, that low-income families could be living with and the impact of the cost-of-living crisis is likely to be making even worse.
“Parent Club can guide people to free and confidential tailored advice from local authority employment services, where they can access support relevant to their own work and family situation.
“It also offers information on how to get help from the Money Talk Team who can advise on areas such as maximising income and dealing with debt. Parent Club also provides sources of support with mental health and stress.
“Tackling child poverty is our national mission. We want to make sure parents know what help is out there and claim any support they should be getting.”
Citizens Advice Scotland CEO Derek Mitchell said: “When times are difficult it can be easy to feel overwhelmed by bills mounting up – but our advice is free, confidential, and impartial.
“The Citizens Advice network is working with the Scottish Government to deliver the Money Talk Team service. We can check to see what payments you might be missing out on or any cheaper deals are available to you. If you are struggling with debt we can help with that too.
“Don’t delay, you could be missing out on money that could make a huge difference to you and your family’s finances.”
73% of UK adults with financial concern for others say ensuring the right people receive money is important when gifting money
Yet 57% of adults surveyed do not have a will in place
Nearly half (45%) have never spoken or will not speak about pension death benefit nomination, lasting power of attorney or a trust with family
More than half of the UK with financial concerns for others (57%) do not have a will in place, according to new research from Quilter, leaving their family finances open to challenge when they pass away.
Of those that do have a will, the majority (53%) have not updated it within the last five years, with a further 14% never having updated it at all. Worryingly, 16% of over 55s have never updated their wishes.
Meanwhile, one in four of those with financial concern for others (25%) said they would be willing to contest someone else’s will if they felt the estate hadn’t been divided fairly, highlighting the need to have an inheritance plan well established and communicated with family.
According to the Kings Court Trust, £5.5 trillion will be passed between generations in the next 30 years. Quilter is warning those who do not have a will or have not updated it in the last 10 years to put one in place to ensure inheritance is passed on in accordance with their wishes.
This comes as the research also showed that when gifting money, an important aspect was ensuring the right people in the family receive the money, with three quarters (73%) citing this as important. Ensuring recipients save tax was another key aspect, with just over half of respondents (55%) stating this is important.
The research also found that45% of people have never or won’t speak about pension death benefit nomination, lasting power of attorney or a trust with their family, again leaving their wishes undetermined.
Rachael Griffin, tax and financial planning expert at Quilter, said: “Inheritance is a highly emotive topic for family to discuss, but many are simply hoping for the best and ignoring what is clearly an important subject.
“Everyone has desires for what happens to their money and their possessions when they pass away, so it is vital these are recorded and regularly updated. Not doing so leaves an estate up for challenge, and this will only delay the grieving process for your family members after you die.
“Encouraging conversations about money and inheritance between family members is the major theme that has emerged from this research. The vast majority see the right family members receiving the money as an important aspect of gifting. However, failing to talk about your estate and your wishes with those family members is just adding a layer of risk on to your inheritance.
“It is also important to remember that while a will is a fantastic way of recording your wishes, you must not forget things like pension death benefit nominations and lasting power of attorney. These are also crucial elements in ensuring your affairs are managed in the way that you want them to be following loss of any capabilities or death.
“Having these discussions with family and ensuring documents are kept up to date will ensure that vast sums of money that are due to flow through the generations will do so in the intended way.”
HM Revenue and Customs (HMRC) is changing the way taxpayers who use a repayment agent can receive overpaid tax to protect them and raise standards among repayment agents.
HMRC will introduce legislation to change the way repayment agents are paid for their services and better protect customers from the unscrupulous tactics used by some operators. This means stopping the use of legally binding ‘assignments’ as part of claiming an Income Tax repayment, which could only be cancelled if the agent and taxpayer both agreed to do so. This can be challenging for customers who become dissatisfied with their agent, or who simply wish to take over managing their own claim.
Under new arrangements, if a taxpayer chooses to use a repayment agent to reclaim overpaid tax and wants it sent to the agent, they will need to make a nomination, which they can cancel at any time. The new process will make it easier for taxpayers to stay in control of their repayments.
Angela MacDonald, HMRC’s Deputy Chief Executive and Second Permanent Secretary, said: “Taxpayers deserve better – we want to make sure they are better protected before choosing to enter into an agreement with a repayment agent. HMRC’s updated standards for agents will level the playing field and provide the benchmark we expect all repayment agents to meet.”
As a result, HMRC is today also setting out the following measures:
updated standards for agents – applicable to all tax agents and include greater transparency requirements
a new HMRC registration process for repayment agents – to make the agent sector more transparent so customers better understand what they are signing up to
Victoria Atkins, Financial Secretary to the Treasury, said: “For too long taxpayers have been left in the dark as a result of misleading and opaque agreements with repayment agents.
“These new measures will ensure those who are entitled to claim a tax repayment or relief can do so freely and easily – whether they choose to do this themselves or by using an agent.
“This Government is making it easier to navigate the system for all taxpayers using an agent to claim money that’s owed to them.”
Victoria Todd, Head of the Low Incomes Tax Reform Group, said: “We welcome these additional steps, which show HMRC recognises the important role they play in consumer protection.
“Refund companies have a legitimate role in the tax system, but the practices of some of these companies in recent years have been unacceptable. The proposed changes will hopefully address problems around the use of assignments, increase transparency for taxpayers and set clearer standards for these companies’ behaviour.
“Alongside this, it is important that more effort goes into raising awareness of refunds and ensuring it is as simple as possible for taxpayers to access them. We look forward to working with HMRC on the detail of the proposals.”
These changes form part of the government’s commitment to tackle problems in the repayment agent market, which is currently an unregulated sector.
Responses to HMRC’s recent consultation overwhelmingly supported the need for improving standards in the repayment agent sector.
greater evidence of customer consent. This aims to ensure that taxpayers better understand the agreement they’re entering into
stricter transparency rules, including introducing a 14-day ‘cooling off’ period for customers after entering into an arrangement with an agent, and an obligation on agents to ensure all communications and advertising material are fair, clear, accurate and do not mislead or conceal material facts
Further details on the approach to registration for repayment agents will be set out in due course.
If taxpayers think they are owed a tax rebate, they can claim directly from HMRC via the free and secure service on GOV.UK and will receive 100% of the money owed.
Cash strapped Scots are being advised on how to survive the tough gap between December and January’s payday
Penny-pinching pros at NetVoucherCodes.co.uk have put together ways to help ease the pressure on your finances during this stretch.
Many workers receive an early payday in the run up to Christmas and although this is helpful during the festive season, the next payday can often seem far away.
Brits are being advised to cook in bulk and check their monthly subscriptions as ways to keep an eye on their spending.
Consumer expert, John Stirzaker from NetVoucherCodes said: “A lot of people get paid early in December to help fund their Christmas which is great at the time but it can often leave us feeling like the next payday is miles away which can be difficult, especially in today’s climate.
“January tends to feel like a bit of a tough month for most people but there are a few things you can do to help ease the financial pressure like cancelling unwanted and unused subscriptions.
“Other ways to help lighten the load in January include cooking in bulk and avoiding January sales.”
How to survive the wait until January payday:
Shop smarter
An obvious solution is to refrain from doing any unnecessary shopping on clothes and luxury items that you can go without.
However, it’s not always that simple and if you do find yourself having to buy something try using price comparison websites or look for discount codes.
Cook in bulk
Instead of cooking a separate meal each night why not try meal prepping and cooking in bulk. This way you can freeze your food and take it out when you need it.
This is cheaper than buying ingredients for a different meal each night and not only does it save you money, but it saves you time as well in the week whilst you’re busy working.
Avoid unnecessary spending
It can be very tempting to grab that coffee on the way to work or pop out and buy lunch while on your break. Try making a coffee before you leave and consider meal prepping for the week ahead. That way you won’t be tempted to buy lunch knowing you have plenty to last you for the week.
Dry January
If there’s ever a time to do it, you may as well stop drinking with the rest of the nation. As well as being good for your health, you’ll also find it’s good for your bank account.You’d be surprised how much money you save in a few weeks when you aren’t spending it on alcohol.
Sell unwanted items
Social plans tend to die down in January with everyone in similar financial situations so this should give you some free time to go through and clear out any unwanted items.
And perhaps you’ve been given things at Christmas that could replace other items you have. Selling these online is a great way to get a bit of extra money in January.
Check monthly subscriptions
Collectively, Brits have been known to spend around £1.8 billion on unwanted subscriptions a year.
Now is a good time to go through your subscriptions and cancel any that you do not use or need or maybe even put some on hold until the next payday.
Think about gym memberships, streaming services and delivery subscriptions.
Don’t be tempted by January sales
January sales can be very tempting and you may be thinking if there’s any time to grab a bargain it’s now. But the truth is if you didn’t need it in time for Black Friday or Christmas, then you probably don’t need it now.
Avoid racking up unnecessary debt
A lot of retailers now offer a buy now pay later scheme and whilst these might seem like a good idea now, they’ll be an unnecessary worry come January.
· Overall, nearly a third of adults in Scotland have less than £100 put away.
· Almost half of people who use credit are anxious about how much they owe.
· Over a third are anxious about the number of credit products they have.
· Free help is available, but six in seven people still struggle to talk about money.
Almost a million people across Scotland have no savings and another 450,000 have less than £100, according to new research from the Money and Pensions Service (MaPS).
The survey of 301 adults, carried out for Talk Money Week (November 7-11), shows that one in five (20%) have nothing put away and another one in ten (10%) have £100 or less.
This leaves almost a third of adults living without a financial safety net to cope with the rising cost of living or unexpected bills, meaning some may have to use credit.
MaPS says although credit is an important tool when used and managed well, it’s crucial that people understand what they can afford and have a plan to pay it off.
However, the figures also reveal that many people are already finding this difficult. Among the 82% of Scotland residents who use credit, two in five (43%) are now anxious about how much they owe. Two in five (40%) are worried about the number of different products they have.
As cost of living pressures start to hit home, MaPS says it’s more important than ever to talk about money before problems set in. However, the survey also reveals that 85% of people still avoid discussing their finances.
Asked why, the most common responses were ‘not wanting to be judged’ (24%), ‘shame or embarrassment’ (20%) and ‘fear of burdening others’ (17%).
During Talk Money Week, MaPS is encouraging everyone to open up about money, plan for their financial future and take free debt advice as soon as they need it.
The organisation says its MoneyHelper service can be people’s first port of call, offering free guidance on topics like everyday money, savings and where to find free debt advice.
It also provides a range of information on dealing with money issues, including step-by-step guides on how to talk to your creditors or discuss money with family and friends.
Allison Barnes, Scotland Manager at the Money and Pensions Service, said: “Over a million people across Scotland find it a challenge to save and this leaves them vulnerable when sudden expenditure items arise. When you add in the anxiety that they feel with their credit commitments, the weight of that worry can quickly become overwhelming.
“This Talk Money Week, we want everyone to start the conversation with family or friends and share the burden of any money worries. By dealing with the problem head on, people can discover just how helpful free debt advice can be and see the importance of talking to their creditors early. They can also begin to find a way forward, no matter how difficult their situation might feel.
“Free help and guidance on how to do all of this is available via our MoneyHelper service and I’d urge everyone who needs it to get in touch today.”
The week is an opportunity for everyone to get involved with events and activities across the UK which help people have more open conversations about their money – from pocket money to pensions – and continue these conversations year-round.
This year’s Talk Money Week will focus on the theme of ‘credit’ – to help demystify some of the jargon, build people’s understanding of credit products, and what their options are, including other forms of support that might be suitable. However, we encourage people to use the week as an opportunity to talk about any aspect of money.
Castle Community Bank (Castle) the credit union based in Leith, Edinburgh, has boosted its growth plans and financial inclusion ambitions by making key appointments to its Board and Executive team.
Experienced non-executive director Stephen Pearson has been appointed as Chair of the Board. Following a career in law and financial services, Stephen has also recently been appointed Chair of the newly formed Financial Inclusion For Scotland.
As Chair of Castle, Stephen will be responsible for leadership of the board, ensuring that it effectively oversees Castle as it continues to grow and support its members through the cost-of-living crisis.
Last year Castle appointed a new chief executive, Adrian Sargent, who, alongside the previous chair, Ian Irvin, has overseen a period of substantial growth to ensure its sustainability in a difficult financial climate.
In addition, on 1 October 2022 Suzanne Gush was appointed as Chief Financial Officer. Suzanne has significant financial services experience and will support the board and management team in this next phase of Castle’s growth.
Stephen Pearson said: “The current cost-of-living-crisis and challenging UK financial climate, illustrate how important it is that all communities have access to fair savings and loan products as well as financial education.
“I’m looking forward to helping Castle and its partners make a positive difference in north Edinburgh and beyond, at such a key time for the organisation.”
Adrian Sargent said: “Stephen will be a great asset for Castle as we continue growing. Being fintech enabled, Castle is now well placed to help its members from a position of increasing strength. With Stephen’s fresh perspective and ethical fintech-savvy, Castle can find new ways of supporting our members.
“At Castle we are about sustainability for both the organisation and the community, and we are passionate about working hard for our communities. I’m excited about the next chapter for Castle, working with Stephen, Suzanne and the rest of the team.”
Castle offers savings and loans like any high street bank, but instead of making a profit for shareholders, Castle can invest surplus revenue into projects supporting its community.
As a credit union, Castle is regulated by both the Prudential Regulatory Authority (PRA) and the Financial Conduct Authority (FCA) who are part of the Bank of England.
The Castle team sees the community bank as a force for good for its members who can access fair products that would otherwise be unavailable to them from mainstream banks. Castle also seeks to encourage thrift and financial well-being – essential tools for surviving the cost-of-living crisis.
How the new interest rates affect house prices and rent
Housing market: hurry if you’re selling, halt if you’re buying, stay if you’ve borrowed, finance experts advise
Landlords will likely increase rent prices or sell to cope with increased mortgage repayments
Inflation and interest rates will keep rising, but house prices are already slowing down
The Office for National Statistics announced last month that UK inflation rose to 10.1%, from 9.4% two months earlier. The Bank of England expects it to further increase, peaking at 13.3% in October. The accompanying higher interest rates, currently at 1.75%, and bleak two-year economic outlook generally means bad news for homebuyers, landlords and renters across the UK.
Top market analysts at CMC Markets expect interest rates to further rise to 2.25% in September. This directly impacts mortgages on variable rates – around 1 in 5 households in the UK – and another 3.1 million whose fixed-rate periods expire in 2022-2023, according to UK Finance estimates.
Borrowers whose repayments are directly linked to the base rate, as set by the Bank of England, will now face mortgage repayments at rates between 3% and 4%, up from 1.75% and 2.75% only five months earlier. This will inevitably spill into rent prices.
CMC Markets analysed the latest data for June 2022 from HM Land Registry, published on August 17th, and concluded that the likely tendency for house prices is in a temporary slowdown, which is good news for those waiting a little longer to buy a home.
Michael Hewson, Chief Market Analyst at CMC Markets comments: “Houses sold in June 2022 only increased in price by 1% compared to May, whereas, last year, this constituted a much more generous 5.7% surge.
“This is only the first month this year for prices to slow down at such a fast rate, so some caution before jumping to conclusions is advised. Remember, house prices may be slowing down, but they are not decreasing. Importantly, since this is transactions data processed at the time, it does not take into account the big leap in interest rates that the Bank of England announced later that month, let alone the even bigger hike in August.
“Therefore, despite the soaring inflation and rising consumer prices across the board, UK house prices appear to be trailing behind because demand for homes has generally come to a screeching halt. Most buyers are weathering the storm for a few more months at least, while some are also working out how the cost of living crisis will pan out in the medium term so that the new mortgage is not squeezing their pockets beyond their comfort zone.
“For those still keen to get on the property ladder, there are plenty of fixed-rate banking products that can insulate them from the current spiralling interest rates on mortgages. They should, however, prepare for the possibility of being faced with higher-than-expected repayments once the fixed rate period expires, as the new variable rates are at the lender’s discretion. Fixed rates are not a cure-all either, as they may now be set to a higher level to start with.
“The buy-to-let market is equally volatile. Landlords will either pass the increased mortgage repayments onto tenants by increasing their rent or simply sell fast to lock in a better price.
“Right now though, those already on the property ladder are generally better off staying put rather than moving or re-mortgaging. They would not get a good deal on their old house in this market and may likely end up losing more money overall.”
What did the Bank of England do earlier in August?
The Bank of England explained that the rise in interest rates was necessary due to external pressures which are expected to persist. This means that British firms and residents will continue to feel this weight reflected on rising domestic prices, wages outpaced by soaring inflation, and even higher mortgage repayments, despite the Bank’s attempt to widen the borrowing pool through less restrictive mortgage rules.
Although historic, the Bank’s decision was not a surprise for trading analysts at CMC Markets, a London-headquartered financial services company, who believe the Bank was expected to raise interest rates higher than 1.25% during the June meeting, as a means to keep import inflation in check.
This is on the backdrop of a 10% year-to-date depreciation of the British pound sterling against the US dollar and an indication from the Federal Reserve, the US central bank, of a further interest rate increase by 0.5% or 0.75% in September.
Michael Hewson comments: “The UK currently fares worse than both the EU and the US. This is due to its closer dependence on energy shocks than the States and less government intervention to soften the blow compared to its European counterparts.”
What’s next and when will things calm down?
Other than adjusting the interest rates to the accurate level to keep abreast of import inflation, the economic projections for the UK paint a bleak outlook for the next two years.
The UK is projected to enter a recession in the final quarter of this year, the Bank of England announced. The country’s economy will contract by 1.25% in 2023 and 0.25% in 2024, however, inflation is becoming a much bigger long-term threat, with unrealistic chances of falling back to the desired 2% much before 2024.
The current political race for the Conservative Party leadership and the consequent fiscal policies promoted by the new British government is a major factor to take into account for any inflation, GDP, and unemployment projections and investment decisions.
As it stands with the current measures, inflation is expected to peak at 13.3% in October – a sharper increase than the Bank anticipated in June, originally estimated at 11%. It will continue to rise throughout 2023 only to decline in 2024.
Meanwhile, forecasts for the Consumer Price Index (CPI) are less optimistic now, expected to decrease only to 9.5% in the third quarter of 2023, although the Bank anticipates a sharp fall in prices immediately thereafter.
Selling prices are set to increase to reflect rising costs while real household post-tax income is expected to plunge in 2022 and 2023. The Bank predicted that core prices will peak at 6.5% this year, meaning that, in the following six months, food and energy will constitute more than half of the headline CPI.
The next meeting for the Monetary Policy Committee, where the Bank of England will decide what the new base interest rates might be, is set for September 15th.
