Savings accounts are disappearing rapidly as the expected cut to the base rate draws closer, says the Guardian. Moneyfacts, a data provider, found that 13 best buy savings deals were withdrawn in July – and have yet to be replaced. These include a three-year bond from Saga at 1.8 per cent and other deals from Virgin Money. The Post Office, too, has scrapped its top-paying three-year bond. Savers will be badly affected if the Bank of England cuts the base rate to 0.25 per cent as anticipated, the paper warns. On the other hand, borrowers are likely to do well. Moneyfacts found that mortgage rates have dropped to a new low of 2.48 per cent on an average two-year fixed rate deal – down from 2.68 per cent a year ago.
The Independent leads with news that home ownership has fallen to its lowest level since 1986. Levels in England peaked at 70.8 per cent in April 2003, but in February of this year had sunk 7 per cent to 63.8 per cent, according to research from the Resolution Foundation. Greater Manchester is the worst hit, showing that the housing crisis isn’t just a London problem. Only 57.9 per cent of Mancunians own their home – down from 72.4 per cent in April 2003. The proportion of private renters nearly doubled between 2003 and 2015, the foundation found, from 11 per cent to 19 per cent, despite renters spending more of their income than those with a mortgage. ‘These drops are more than a simple source of frustration for the millions of people who aspire to own their own home,’ says Stephen Clarke, a policy analyst at the Resolution Foundation. ‘The shift to renting privately can reduce current living standards and future wealth, with implications for individuals and the state.’
Cutting interest rates would fail to boost household or business spending, warns a former Bank of England rate-setter. In a letter to The Times, Dame Kate Barker says that more harm than good would be done by lowering rates to 0.25 per cent, as is expected to happen at the Bank of England’s monetary policy committee meeting on Thursday. Dame Kate is concerned that a weak pound will squeeze household finances and make consumers cut back. ‘The economic implications of the Brexit vote would be better tackled by loosening fiscal policy,’ she writes.
Speculators, investors and hedge funds are betting against the pound amid interest rate speculation, reports the Daily Mail. There are more short positions held on sterling than at any time since records began in 1992, the paper says. It is expected that the Bank of England will begin a process of quantitative easing by printing £50bn of new money. But this typically weakens a currency, the Mail says. Figures yesterday showed that manufacturers had suffered their lowest month for three years – sending the pound falling again against the dollar and the euro to $1.32 and €1.18 respectively.
And, finally, some good news: there are two positions advertised for every job hunter out there, meaning finding employment should be easier than ever, says the Daily Telegraph. Adzuna, a recruitment website, found that there were 0.5 jobseekers competing for each one of the 1.158 million positions advertised in June. And what’s more, there doesn’t seem to have been a slowdown in hiring since the referendum vote of 23rd June. Cambridge is the best city to find work, the Telegraph says, with 14 positions for every job hunter. However, it seems that many of the jobs are for lower-skilled roles as the average salary advertised has dropped 1 per cent to £32,735. And the problem of companies not being able to find the right staff will be exacerbated by any cuts to the free movement of labour.