As reported today inflation has risen again, rising by half a percentage point to 4.5pc. The consumer price index (CPI) - the Government's official measure of inflation - accelerated at its fastest rate since 2008, far outstripping economists' predictions of a 0.1 percentage point rise. It continues to be more that double the Government's target of 2pc.
The retail prices index, which includes housing-related costs, fell by 0.1 percentage points to 5.2pc, from 5.3pc the previous month.
Basic-rate taxpayers now need a savings account paying 5.63pc in order to beat inflation, while higher-rate taxpayers have to earn an interest rate of 7.5pc to beat the CPI.
According to calculations by Moneyfacts.co.uk, the eroding effect of inflation on savings means that £10,000 invested five years ago, allowing for average interest rates, inflation and basic-tax at 20pc, would have the spending power of just £9,481 today.
If you wish to review your deposit savings contact Darren Crane at Innes Reid on telephone number 01244 347 583.