How do rising interest rates impact savings rates?

Rising interest rates generally lead to higher savings rates, as banks adjust their rates based on the Bank of England's base rate. When the base rate increases, banks may offer better returns on savings accounts, making it attractive for savers. For instance, in 2023, higher base rates resulted in savings rates climbing past 6%, the highest since 2008^[5].

However, when rates begin to fall, as noted with recent expectations for 2024, savings rates tend to decline as well. Experts predict that savings rates will decrease gradually in the coming year, with fixed rates likely dropping below 5% as the base rate falls^[1][6].