Building Society Savings Boom

Building Society Savings Boom

Building societies recorded a huge £1.35bn in savings business in February, the largest inflow the sector has seen for 11 years.  Recent figures published by the Building Societies Association show that the February figure compares with £728m in the same month last year.  

Head of savings policy at the BSA Brian Morris said: “Societies enjoyed another strong month as high interest rates and attractive products encouraged individuals to save with them”.

Our view

This wouldn’t have anything to do with the fact that building societies are offering extremely attractive savings rates at the moment to attract cash flow capital?

Nor would it have anything to do with stock markets and property investment markets being quite volatile?

We suggest this is a short-term cash flow fix and building societies doing this face a mass exodus of funds when their interest rates are cut, so the liquidity problem has not gone away.  

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