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This week’s roundup includes news of a number of UK banks failing to pass on the interest rate rise in full to savers, a reported widespread fall in house prices, the end of circulation for the old £10 note and inflation holding steady in October.

More banks ‘fail to pass on rate rise in full’

A number of banks have failed to pass on the full rise in base rates to savers, despite pleas from the government and Bank of England (BoE). NatWest, Tesco Bank and the Royal Bank of Scotland have announced their savings rates will rise by 0.2% or less, despite the base rate being pushed up to 0.5%.

The Royal Bank of Scotland Group - which includes NatWest - said the majority of its accounts would pay more, with the average rise being 0.2%. However, it would not say whether the 0.01% rate on its Instant Saver account would be subject to any increase.

Building societies have taken action more quickly, with Nationwide confirming that it would increase savings rates even before the BoE announced it was pushing up the rates.

Fellow building societies Skipton, Norwich and Peterborough, and Chelsea, however, have skipped on the rate boost on a number of variable accounts.

Lloyds Banking Group, whose brands include Halifax, finally announced rate increases last week, but most savers will only get an extra 0.15%, rather than the full base rate increase of 0.25%.

House price falls ‘are widespread’

House prices are now falling in four areas of the UK, the latest report from the Royal Institution of Chartered Surveyors (RICS) has revealed. According to the body, prices are declining in London, the South East, East Anglia and North East England.

Other parts of the UK have seen an increase in house prices. Homes in Scotland, Wales, North West England and Northern Ireland have continued to rise.

Surveyors also thought the short-term outlook for prices was gloomy. When asked what they thought would happen to house prices in the next three months, the majority pointed to falling values in London, the South East, East Anglia, the South West, the North East and the West Midlands.

The RICS report on the housing market presents a negative picture of the market, pointing to fewer buyers and sellers overall. The findings appear to contradict data from Halifax, which said house price growth had increased to 4.5% in the year to October.

Old £10 note to be withdrawn next year

The BoE has announced that the old £10 note, featuring naturalist Charles Darwin, will no longer be legal tender after 1st March 2018.

Confirmation of its removal from circulation comes after the launch of the new polymer £10 note, depicting author Jane Austen, which was put into circulation in September. The old note can still be exchanged by the BoE after the cut-off date.

The Charles Darwin £10 note has been in circulation since November 2000, but lost out to the newer versions on grounds of security as well as durability. The Jane Austen notes include a number of features that make them particularly hard to forge. They also feature an inscription raised in dots, which helps blind and partially-sighted users to identify them.

The removal from circulation of the old paper £10 note follows the official withdrawal of the old round £1 coin, which has been replaced by a new 12-sided version.

UK headline inflation ‘holds steady in October’

British inflation held at its highest level in five and a half years in October, according to the Office for National Statistics (ONS). Consumer price inflation held at an annual rate of 3% in October, which was below economists’ average expectation in a poll for Reuters.

It comes after the BoE raised interest rates for the first time in 10 years and stated that inflation would probably peak at 3.2% in October, before falling slowly to just above its 2% target in three years’ time.

The latest figures are likely to reinforce doubts among finance experts about the BoE’s decision to raise interest rates at a time when the economy is still sluggish, particularly following last year’s Brexit vote.

British inflation increased from a subdued 0.5% at the time of the Brexit vote in June 2016 to its highest since April 2012 in September. According to the ONS, October’s steady increase reflected falls in fuel prices being offset by a higher cost of food. 

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