As recently as July last year not a single savings account in
But are we now turning the corner? The CPI has fallen faster than even the optimists anticipated, dropping to 1.9% - a full percentage point down on seven months ago and the first time in four years it has been below the target set for the Bank of
Moneyfacts says there are now 84 accounts available to savers that negate the effect of inflation and tax.
It's a similar story for wages. Current wage growth at 0.9% (excluding bonuses) remains below the CPI but, with unemployment falling fast, workers should soon be in a strong position to demand pay rises. The economists are predicting that some time in the second half of this year wage growth will finally eclipse inflation - bringing to an end the near five-year squeeze on household incomes. The more excitable among the economics fraternity are reporting sightings of "Goldilocks", last spotted in 2007; in the Goldilocks economy, inflation and wage growth are neither too hot nor too cold, and everything tastes just right.
But the bears haven't gone away yet and most people are still on cold porridge. Even when wage growth starts to outstrip inflation it will take many years for workers to recover their spending power. Real wages, according to a recent
Meanwhile, savers aren't rejoicing. Yes, 84 accounts now pay more than CPI after tax. But that still leaves nine accounts out of 10 that don't beat inflation - and as Moneyfacts reports, rates on cash Isas are still falling.
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