FLAGSTONE WEEKLY UPDATE 02 JULY 2019

FLAGSTONE WEEKLY UPDATE 02 JULY 2019

HSBC, Redwood Bank, Kingdom Bank, Paragon Bank and the Monmouthshire Building Society join the Flagstone Platform

Savers lose out on millions as 10pc of deposits earn no interest 

Inflation falls to 2.00% in May reducing likelihood of Base Rate increase

FTSE European 350 Bank Index rose slightly by +0.4% over the last week

ITRAXX Europe Senior Financials 5-year CDS Index improves by -5.6% over the last week

 

 

HSBC, Redwood Bank, Kingdom Bank, Paragon Bank and the Monmouthshire Building Society join the Flagstone Platform

We are pleased to announce that a number of new banking partners have joined the Flagstone platform, increasing the choice of rates available to our personal, corporate and charity clients.

We are delighted to welcome HSBC as our 34th banking partner, the fourth of the UK’s ‘Big 5’ high street banks to join the Flagstone platform. The products which HSBC have made available on the platform, a 3 Month Fixed Term Deposit, a 6 Month Fixed Term Deposit and a 12 Month Fixed Term Deposit provide ever greater choice and flexibility to individual, business and charity clients.

We also welcome Redwood Bank to the platform, who have launched with a One-Year Fixed Term Deposit rate of 1.40%, available to business clients. Monmouthshire Building Society has become Flagstone’s first building society partner, launching with a 1.00% Instant Access Account for individuals. The first rate made available by Kingdom Bank on the platform is an exclusive 45 Day Notice Account rate of 0.80%, exclusively to charities, whilst a One-Year Fixed Term Deposit rate of 1.95% and Two-Year Fixed Term Deposit rate of 2.21% are the first rates made available on the platform by Paragon Bank.

Clients can easily compare and open these accounts with just a couple of clicks and thanks to the number of UK banks and building societies available to Flagstone clients, it is possible to achieve exceptional diversification; with individual clients able to benefit from full FSCS (Financial Services Compensation Scheme) protection on up to £2.04 million (earning a blended interest rate of 1.37% net of fees), and joint account holders able to hold up to £4.25 million fully FSCS protected (earning a blended interest rate of 1.35% net of fees) in accounts on the platform.

 

Savers lose out on millions as 10pc of deposits earn no interest 

Savers are missing out on millions of pounds in interest, with £1.10 in every £10 held in deals paying nothing at all. Since 2008 the total value of the UK's household deposits held in accounts paying 0% interest has rocketed from £33bn to a staggering £170bn, according to research by the Centre for Economics and Business Research (CEBR), commissioned by Flagstone.

Similarly, a staggering £118bn of the UK's business deposits are earning no interest - a 562pc uplift over the last decade - with this volume of non-interest-bearing business deposits now accounting for 29% of the market.

The research was publicised in the UK press by the Telegraph, the Independent, City AM and the Daily Mail. If you would like to download a free copy of the CEBR report, please click here.

 

Inflation falls to 2.00% in May reducing likelihood of Base Rate increase

Inflation fell to 2.00% in May, down from 2.10% in April, according to the latest figures released by the Office for National Statistics (ONS). This brings the inflation rate back in line with the Bank of England’s 2.00% target. The dip has been attributed to lower transport fares and falling car prices and has resulted in most economists now agreeing that the Bank of England will hold off raising interest rates until the UK has left the EU.

Mike Jakeman, senior economist at PWC said, “we do not expect the Bank to be able to adjust rates until greater clarity is provided on Brexit, which means the end of October at the very earliest."

There are currently 27 rates available on the Flagstone platform to individual savers which offer an interest rate equal to or in excess of 2.00%.

 

FTSE European 350 Bank Index rose slightly by +0.4% over the last week

The FTSE European 350 Bank Index rose slightly by +0.4% over the last week, up to 3,827 from 3,811, as markets continue to breathe a sigh of relief due to recent survey results indicating that the eurozone economy grew in June and on hopes that the European Central Bank (EBC) may restart quantitative easing (QE) in the near future.

 

ITRAXX Europe Senior Financials 5-year CDS Index improves by -5.6% over the last week

The ITRAXX Europe Senior Financials 5-year CDS Index spread (series 31) has continued its improving trend, down by -5.6% over the last week to 63.5bps from 67.3bps, as European markets continue to be reassured by further signs that the European Central Bank (EBC) may restart quantitative easing (QE) in the near future to support bank lending.