National Savings Headline Grabbing 6.20% pa

National Savings and Investments (NS&I) has today released its latest, and we believe, headline grabbing 1-year Guaranteed Growth Bond Rate of 6.20% pa.

This is a massive 1.20% pa increase from the old rate of 5.0% pa.

 6.20% pa guaranteed for 1 year, backed by the government is a superb, market leading deal.

Comment:  What does this tell us?

• Was this rate hike to stop outflows from NS&I to competitors offering higher rates as competition heats up?
• Is the government trying to borrow/raise more funds via the backdoor with NS&I?
• Is the government trying to encourage competitor banks and building societies to match/beat these one-year rates effectively encouraging us all to save rather than spend to reduce inflation?
• Does the huge 1.2% pa increase to 6.2% pa indicates that the government already knows that the Bank of England is likely to increase interest rates again on 21^st September 2023?