How to protect your savings from inflation

The pressure on household finances is starting to increase. Costs – particularly on food and fuel – have been rising in recent months in response to the fall in the value of sterling since Britain’s vote to leave the European Union in June 2016. Those increasing costs pushed the UK’s inflation rate to 1.8% in January – its highest rate since June 2014 and a rise of 0.2% on December’s figures. While the headline figures look mild when compared to the high inflation of the late 1970s and early 1980s when prices were rising by as much as 25% a year, the picture is far from rosy. Earnings growth continues to be subdued with household incomes under greater pressure than at any time since the 1990s. And because Britain imports far more than it exports, it means that the cost of everything – from bananas to German cars, from petrol to foreign holidays – is on the rise. The rise in inflation is not enough for the Bank of England to raise base rates which are currently at a hi
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