While many of us have been cutting back in the face of rising everyday expenses such as petrol and food, it looks like there's little respite to be gained as the Bank of England's Monetary Policy Committee has raised its expectations for inflation above its target rate of 2 percent, according to a record of its most recent meeting.
'Despite the fall in CPI inflation in June, it was likely that inflation would rise further, to over 5pc, in the coming months,' the minutes to the gathering said. 'In the light of recent developments in utility and food prices, the peak in inflation was likely to be a little higher and come sooner than the Committee had previously expected.'
'It may be more in favour of the mortgage owner at the moment, but someone defaulting on their mortgage has greater implications than someone not earning a great rate on their savings.'
Andrew Hagger of Moneynet, said: 'Even in a cash Isa you need to lock your money away for four or five years to beat inflation. Savers will be miserable for some time.'