fear of finance
Saturday 02 November 1996
Recorded cases of a trend being reversed after just one move are rare indeed, and 7 per cent looks likely by the end of next year.
But unlike the housemaid, the Chancellor will expect to enhance his reputation for prudence, probity and putting duty before pleasure and political opportunism.
That will last at least until the Budget, when the cynics now believe he will use his new-found reputation for monetary rectitude to justify some fiscal laxity, in the shape of tax cuts which could not otherwise be delivered without risking a run on sterling. If he holds back on tax cuts now, he really will be a candidate for sainthood.
But credit where it is due. He has done a remarkable job in sustaining the recovery, which looked like faltering in 1994, without having to put rates up until now, but the Prime Minister has never been able to call the election on the back of the recovery and the Chancellor has finally been forced to concede an upturn in rates with the election still seven months away.
In the short run, the first rise in interest rates for two years is unlikely to have much immediate impact on personal borrowers or investors.
The link between base rates and borrowing and lending rates is not as immediate as it used to be. The big mortgage lenders have been quick to assure borrowers that they have no plans to raise their standard variable mortgage rates, and there have been few immediate changes in rates offered to investors.
The most immediate beneficiaries will be investors who have treasury accounts with merchant bankers Close Brothers.
The minimum investment is pounds 50,000 and the interest is automatically linked to rates in the London inter-bank market.
It pays out the bid rate, which is 0.125 per cent below the offer rate, but it is automatically reset each month and from yesterday the rate has jumped to 61/16 per cent.
Other changes are few and far between as our weekly table from MoneyFacts (left) confirms. But we have now entered a period of phoney war on interest rates.
Nothing dramatic is happening and this week's rise in rates alone is unlikely to kill the recovery in the housing market.
Demand for mortgages remains relatively low, if only because there is a shortage of houses for sale, but overall demand for credit is rising and competition for savings will certainly push rates up the next time base rates move.
They might not rise a full 50 basis points (0.5 per cent) next time, but some adjustments are inevitable next time bases rates go up.
Meanwhile with base rates set to be above current levels for two, maybe three more years, existing fixed rate mortgage offers up to the end of the century at least will look increasingly attractive.
These offers may be exhausted and replaced by progressively higher rates.
Best borrowing rates
Telephone % Rate and Max Fee Incentive Redemption period adv % penalty
Scarborough BS 0800 590547 0.20 for 1 year 85 0.75% - 1st 5 yrs:7.04% of sum repaid
Newcastle BS 0191 244 2468 6.49 to 1/1/00 95 pounds 295 - To 1/1/03: 5% of advace
Northern Rock BS 0800 591500 7.24 to 1/1/02 95 pounds 295 - 1st 6 yrs: 5% of sum repaid
Scarborough BS 0800 590547 0.65% for 1 year 90 - - 1st 5 yrs:6.33% of sum repaid
Principality BS 01222 344188 3.50% to 1/11/98 75 - - To 30/10/01: discount reclmd
Northern Rock BS 0800 591500 4.24% to 1/1/00 95 Refund valn fee 1st 7 yrs: 5% of sum repaid
First time buyers fixed rates
Alliance & Leic BS via local branch 2.10 to 1/10/97 95 0.5% - To 1/10/01: 6 mths interst
Northern Rock BS 0800-591500 4.49 to 1/1/99 95 pounds 295 ___ 1st 6 yrs: 5% of sum repaid
Cheltenham & Glou 0800 272131 7.25 for 5 years 95 pounds 495 Free valuation 1st 6 yrs: 6 mths int
First time buyers variable rates
Principality BS 01222 344188 1.00 to 1/11/97 90 - - To 31/10/01: discount reclmd
Greenwich BS 0181 8588212 3.49% for 2 years 95 pounds 250 - 1st 5 yrs: discount reclaimed
Northern Rock BS 0800 591500 5.24% to 1/1/02 95 - Refund valn fee 1st 7 yrs: 5% of sum repaid
Telephone APR % Max LTV Fixed monthly payments (pounds 3,000 over 3 years)
Unsecured With insurance Without insurance
Northern Rock BS 0345 421421 12.9H pounds 112.66 pounds 102.59
Direct Line 0141 2489966 13.9E pounds 112.86 pounds 101.33
Nationwide BS via local branch 14.9 pounds 113.15 pounds 102.49
Secured (second charge) Max LTV Advance Term
Clydesdale Bank 0800 240024 7.5 Neg pounds 3K - pounds 15K 6 mths to 25 years
Royal B of Scotland 0131 523 7023 8.7 70% pounds 2.5K-pounds 100K 3 years to retirement
Barclays Bank 0800 000929 9.3/9.6 80% pounds 10K-pounds 75K 5 to 25 years
Telephone Account % pm APR % pm APR
Woolwich BS 0800 400900 Current 0.76 9.5 2.18 29.5
Alliance & Leicester 0500 959595 Alliance 0.76 9.5 2.20 29.8
Abbey National 0500 200500 Current 0.94 11.9 2.18 29.5
Telephone Card Type Min Rate APR Annual Int. free Income % pm % Fee period
Co-operative Bank 0800 109000 Advantage Visa - 0.64N 7.90N nil 0 days
Robert Fleming/S&P 0800 829024 MasterCard/Visa - 0.9167 11.50 nil 0 days
RBS Advanta 0800 077770 Visa - 0.94N 11.90N nil 56 days
Co-operative Bank 0345 212212 Visa pounds 20,000 0.50 10.50 pounds 120 46 days
RBS Advanta 0800 077770 Visa pounds 20,000 0.94N 11.90N nil 56 days
Royal B of Scotland 01702 362890 Visa pounds 20,000 1.05N 14.50N pounds 35 46 days
Telephone Payment by direct debit Payment by other methods % pm APR % pm APR
John Lewis via store 1.39 18.0 1.39 18.0
Marks and Spencer 01244 681681 1.87 24.8 1.97 26.3
Sears via store 1.94 25.9 2.20 29.8
Best savings rates
Notice or term
Portman BS 01202 292444 Instant Access Instant pounds 100 4.50 Year
Co-0perative Bank 0345 252000 Pathfinder Instant pounds 5,000 4.75 Month
Direct Line 0181 667 1121 Instant Savings Instant pounds 10,000 5.50 Year
Direct Line 0181 667 1121 Instant Savings Instant pounds 50,000 5.75 Year
INSTANT ACCESS POSTAL ACCOUNTS
Teachers' BS 01202 887171 Bullion Postal pounds 500 4.80 1/2 Year
Alliance & Leic BS 0645 228858 Instant Direct Postal pounds 5,000 5.40 Year
Bristol & West BS 0800 901109 Instant Acess Postal Postal pounds 10,000 5.85 Year
Bristol & West BS 0800 901109 Instant Acess Postal Postal pounds 25,000 6.05 Year
NOTICE ACCOUNTS & BONDS
Chelsea BS 0800.132351 POST-Tel 20 Day 20 day P pounds 5000 6.05 Year
Chelsea BS 0800 132351 POST-Tel 20 Day 20 day P pounds 25,000 6.30 Year
Cheltenham & Glouc 0800 717505 Direct 30 30 day P pounds 100 5.50 Year
National Counties BS 01372 747771 Direct 90 90 day pounds 50,000 6.50 Year
Kleinwort Benson 01202 502404 HICA Instant pounds 2,500 5.00 Month
Halifax BS 01422 335333 Asset Reserve Instant pounds 10,000 4.00 Quarter
Chelsea BS 0800 717515 Classic Postal Instant pounds 10,000 4.35 Year
Chelsea BS 0800 717515 Classic Postal Instant pounds 25,000 4.65 Year
FIXED RATE BONDS
Birmingham Midshires 0645 720721 Fixed Rate Bond 1 Year pounds 5,000 6.30F Year
Yorkshire BS 0800 378836 Fixed RateBond 31/3/98 pounds 5,000 6.60F Maturity
Leeds & Holbeck BS 0113 225 7777 Fixed Rate Bond 2 Year pounds 1,000 6.85F Year
Coventry BS 0345 665522 Fixed Rate Bond 30/11/99 pounds 1,000 7.30F Year
Sun Banking Corp 01438 744505 Fixed Rate TESSA 5 years pounds 8,575 7.30F Year
NatWest Bank 0800 200400 Fixed Rate TESSA 5 years pounds 5,000 7.45F Year
Birmingham Midshires 0645 720721 5 years pounds 1,000 7.00 Year
Principality BS 01222 344188 5 years pounds 500 6.80 Year
West Bromwich BS 0121 607 2415 Fixed Rate TESSA 5 years pounds 3,000 7.45F Year
NatWest Bank 0800 200 400 Fixed Rate TESSA 5 years pounds 5,000 7.45F Year
National Counties BS 01372 747771 5 years pounds 9,000 7.20 Year
Birmingham Midshires 0645 720721 Inflation Beater 5 years pounds 1,000 7.00 Year
GUARANTEED INCOME BONDS (net)
Premium Life 0800 838020 1 year pounds 10,000 5.05FN Year
Premium Life 0800 838020 2 year pounds 10,000 5.45FN Year
Pinnacle Insurance 0181 207 9007 3 years pounds 3,000 5.60FN Year
Pinnacle Insurance 0181 207 9007 4 years pounds 3,000 5.85FN Year
AIG Life (UK) 0181 680 7172 5 years pounds 50,000 6.15FN Year
OFFSHORE ACCOUNTS (gross)
N'castle Bank Gibraltar 00 350 76168 Nova Access Instant pounds 25,000 6.30 Year
Northern Rock Guern 01481 714600 Offshore 30 30 day pounds 25,000 6.35 Year
Derbyshire (IOM) Ltd 01624 663432 90 Day Notice 90 Day pounds 25,000 6.55 Year
Northern Rock, Guern 01481 714600 Millennium Bond 1/1/00 pounds 10,000 7.50F Year
NATIONAL SAVINGS ACCOUNTS (gross)
Investment Accounts 1 month pounds 20 4.75 Year
pounds 500 5.25 Year
pounds 25,000 5.50 Year
Income Bonds 3 months pounds 2,000 6.00 Month
pounds 25,000 6.25 Month
Capital Bond Series J 5 years pounds 100 6.65F Maturity
First Option Bonds 12 months pounds 1,000 6.00F Year
pounds 20,000 6.25F Year
Pensioner's G'teed Income Bond Series 3 5 year pounds 500 7.00F Month
NS Certificates (tax-free) 43rd issue 5 year pounds 100 5.35F Maturity
9th Index linked 5 year pounds 100 2.50+rpi Maturity
Children's Bond Issue H 5 year pounds 25 6.75F Maturity
01 April 2015 12:00 AM
Video: The Independent's Personal Finance Editor runs you through the key facts about Premium Bonds
27 March 2015 08:30 PM
27 March 2015 08:30 PM
20 March 2015 07:30 PM
How to make the most of Isas: You can save more money now, the returns are tax-free and the rules are flexible
20 March 2015 07:30 PM
13 March 2015 09:00 PM
13 March 2015 09:00 PM
10 March 2015 09:03 AM
The Financial Conduct Authority found non-compliance in all reviewed firms
11 March 2015 11:38 AM
Pension expert John Lawson talks on why improved longevity is something to plan for carefully
06 March 2015 08:30 PM
02 March 2015 10:50 AM
The DWP and the FCA have joined forces to investigate transaction charges in occupational pension schemes
04 March 2015 03:00 PM
The company was found to have unacceptably long call waiting times
27 February 2015 07:30 PM
27 February 2015 07:30 PM
27 February 2015 12:01 AM
The NHS is currently bearing a yearly burden of approximately £1.5bn treating cold-related illnesses every winter
Debt in Britain: Numbers seeking help on how to cope with mounting bills goes up by more than half in three years
General election 2015: David Cameron's promise brings uncertainty to investors
Have a happy new financial year
Simon Read: 'It went below the radar but you could be eligible for a tax break on your savings'
Women to lose benefits from contracted-out pension scheme
- 1 Katie Hopkins attacked me on Twitter — so I reported her to the police for inciting racial hatred
- 2 Google April Fools': company unveils backwards search engine and huggable digital assistant
- 3 I might be an MP, but that doesn't stop me fighting sexism with my breasts
- 4 April Fools' Day 2015: The best hoax news stories from around the internet
- 5 Gamers confess the worst things they've done in The Sims
Street preacher quoting from the Bible fined for calling homosexuality an 'abomination'
Katie Hopkins attacked me on Twitter — so I reported her to the police for inciting racial hatred
Woman filmed launching racist tirade against men on the Tube for speaking in 'own lingo'
David Cameron calls Labour 'hopeless, sneering socialists' while announcing 7-day NHS plans
Revealed: Putin's army of pro-Kremlin bloggers
Katie Hopkins reported to the police for race hatred by Labour MP Simon Danczuk after tweet about Pakistani men
iJobs Money & Business
£20000 per annum + commission: SThree: Sthree have an exciting opportunity for...
£18000 - £32000 per annum: Recruitment Genius: A Telesales Executive is requir...
£45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, glo...
£50,000 - £55,000: Neil Pavier: Are you a professionally qualified commercial ...
Day In a Page
This four-bedroom detached home comes with grounds that span to approximately 2.5 acres, as well as two large patio areas and a double garage.
This four-bedroom cottage is a Grade II-listed town house, well-located for the thriving market town of Nailsworth.
A four-bedroom apartment on the ground floor of a stunning period property in North Yorkshire, with two kitchens and a large south-west facing garden.
This high-spec two-bedroom home is part of a smart collection of new flats at Beaufort Park and has a large decked balcony that's perfect for summer drinks.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Overlooking a golf course, this six-bedroom Edwardian detached home spans four storeys and retains many period features including the original, operational servants' bells...
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
In a Grade II-listed manor just outside of Bath, this three-bedroom home is arranged on two floors with a skylight in a vaulted roof line.
Open the living room's bi-fold wooden doors to reveal a retro-style kitchen, and a conservatory leading to a paved garden at this three-bedroom home.
A Grade II-listed, four-bedroom home, in a charming Somerset village, with a two-storey studio that could be converted into a holiday cottage
A modern four-bedroom Victorian home, within walking distance to the high street
A luxury apartment in the Gothic mansion of Wyfold Court in Kingwood, offers six bedrooms spread over three floors and a turret
This school conversion, near Stockwell Tube, oozes New York loft style. The one-bedroom flat features double height ceilings and exposed brick work
This six-bedroom Georgian home is on three floors with open fireplaces, a two-oven Aga, an annexe, and cottage gardens with outbuildings and a car barn
High Crest House covers an impressive 9384sq ft, with almost three acres of grounds including a tennis court and summer house enclosed by electric gates
A six-bedroom farmhouse with separate accommodation in converted stables. Situated in the village of Church Aston, within walking distance to the market town
A two-bedroom flat with under-heated walnut floors and bespoke built-in storage. The Tube and Clapham Common are a short stroll away
A refurbished seven-bedroom townhouse with staff quarters, cinema room, superb gym, steam room and plunge pool
A minimnalist four-bedroom home designed to the highest spec, featuring glass walls and a kitchen space lit by a glass roof
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
A boutique mews house, set around a central courtyard, with three bedrooms and a private roof terrace
A four-bedroom farm-conversion with three bathrooms and two reception rooms
A two-bedroom detached house with ensuite bathrooms and a sun-drenched decked terrace, £750,000
A modern and spacious two-bedroom, penthouse flat with two bathrooms in a prestigious development
A beautifully renovated five-bedroom terrace with three reception rooms and a courtyard garden, £700,000
A four-bedroom period house which has been extended to provide almost 2,500sq ft of living space, £675,000
A pretty three-bedroom Georgian home with a 22ft drawing room and a master suite with a balcony, £525,000
A substanstial family home with five bedrooms and landscaped gardens in the much sought-after Branksome Park area
A well-presented three-bedroom house with front and rear gardens, close to White City station, £475,000
A handsome five-bedroom house in a sought-after location close to the city centre
A five-bedroom country home with valley views, equestrian stables and 27 acres of land, £725,000
A six-bedroom farm house with separate, detached cottages and 371 acres of land
A two-bedroom cottage with parquet floors, chunky beams and an open fireplace
A three-bedrrom flat with 2,733sq feet of living space, a beautiful private garden and 15 acres of communal grounds
A four-bedroom chalet bungalow with three bathrooms and a spacious garden, £525,000