loose change

Abbey National has increased its interest rates for savers as well as borrowers this week, and other building societies and banks are expected to follow, although the majority now seem inclined to wait until after the next Wednesday's meeting between the Governor and the Chancellor to review interest rates.

Abbey has increased the offer on pounds 9,000 in its third edition Tessa from 6.25 per cent to 6.40 per cent, but most products get less of an uplift. Interest on pounds 5,000 in an investment account goes up from 3.85 per cent to 3.95 per cent. Next month Abbey will launch a capital-guaranteed stock market Tessa and raise rates on its fixed-rate bonds.

Bradford & Bingley has launched a new savings bond paying 7 per cent gross annual interest or 6.75 per cent payable monthly. Rates are fixed until March 1999 and the minimum investment is pounds 1,000.

Direct Line is offering a two-year fixed rate bond paying 6.15 per cent gross in year one and 7.55 per cent in year two. Minimum investment is pounds 10,000.

London-based SEC Group, which owns the largest market-maker in traded endowment policies (those sold by policyholders who no longer want or can afford them but prefer to sell rather than just surrender the policy) is launching the first PEP investing in policies. An initial charge of around 5 per cent and annual fees of 1.5 per cent will be payable.