Interest Rates

[anonymous-user]

I get a daily finance newsletter, and over the last few months mortgage interest rates have generally been dropping while savings interest rates have (finally) been increasing.

What might be behind this? Market conditions or potential BoE rate changes?

[NickCQ]

Savings rates are also a function of bank demand for funds, which could be due to increasingly strict liquidity coverage regulation or more asset origination (i.e. balance sheet expansion).

I could imagine more competition for retail deposits given the increasingly punitive treatment of commercial / business deposits.

[uknick]

Twilkes said:

I get a daily finance newsletter, and over the last few months mortgage interest rates have generally been dropping while savings interest rates have (finally) been increasing.

What might be behind this? Market conditions or potential BoE rate changes?

Would you be kind enough to point me to some saving rate increases?

[anonymous-user]

"Moneyfacts has reported that there were 151 savings rate rises versus 45 reductions in July 2017, making it the seventh consecutive month where rate rises have outweighed cuts."

https://moneyfacts.co.uk/news/savings/savings-rate...

[stongle]

Bank of England is going to gold standard liquidity rules for banks hence increased regulatory premium to attract retail deposits. Wholesale (or interbank deposits / lending) carries lower rating so banks increasingly need retail deposits (liabilities) to cover BASLE3 ratios.

Separation of retail and investment arms of UK banks also suggests that rebalancing towards retail deposits make sense as leverage and levy charges bite into investment banking margins.

[uknick]

Twilkes said:

"Moneyfacts has reported that there were 151 savings rate rises versus 45 reductions in July 2017, making it the seventh consecutive month where rate rises have outweighed cuts."

https://moneyfacts.co.uk/news/savings/savings-rate...

Thanks.

[DonkeyApple]

BTL mortgage revenues are falling so lenders are cutting rates on mortgage business to try and win a greater share of flow to make up this shortfall. And on the flip side there is a bit of competition to get cash in on the other side so many are raising rates there.