Savers grow tired of low deposit rates

Pádraig Hoare

Lump-sum savers are growing disenchanted with the low deposit rate environment, and more are looking towards investment to receive a return on their money, a survey has found.

The joint Bank of Ireland and ESRI savings and investment index hit a three-month low in June, with the index falling to 100 compared to 101 in May; a rating above 100 is considered positive.

However savings fell to 99 in June from 104 in May, driven by weaker saving patterns and a deteriorating outlook for the savings landscape, Bank of Ireland said.

For the first time since the index began, sentiment towards saving has dipped below that of investment, which increased to 102 in June from 98 the month previously.

Tom McCabe of Bank of Ireland investment markets said: “Although regular saving habits remain strong, greater numbers of older savers, in particular, are indicating that it is a bad time to save. To us, this is clear evidence that lump sum savers are growing more disenchanted with the low deposit rate environment.”

In a separate survey, Ulster Bank’s purchasing managers’ index (PMI), which tracks changes in total construction activity, was 58.4 in June; any reading over 50 represents an expansion in activity.

Rising workloads encouraged companies to step up hiring, while the rate of input cost inflation eased to a nine-month low, Ulster Bank said.

Chief economist for the Republic, Simon Barry said: “The headline PMI eased back from what was an extremely elevated reading in May to stand at 58.4 in June but this is still very much a level which signals ongoing rapid gains in activity.

“Furthermore, confidence among firms about year-ahead prospects for construction remains very elevated, with 56% of respondents expecting activity to rise. The start-up rate in construction is now the highest of the business economy’s three main sectors, having —unsurprisingly — been the lowest during the crisis.”

Employment increased again in June, extending the current sequence of job creation to 58 months, while the pace of hiring was faster than in the previous month due to increased demand, Ulster Bank said.

More in this Section

US confirms talks on trade deal with Britain to begin immediately after Brexit

Monitor shows Irish women more likely to start a business than most of their EU counterparts

Google to charge device makers a fee for access to key Android apps in the EU

Index shows weak growth in consumer spending prior to Budget

Breaking Stories

Cork Film Festival launches 2018 programme of 250 films

How to make Prue Leith’s ‘almost Thai’ fish cakes

Could this be the most spiritual retreat in Vietnam?

What’s it like to stay in Richard Branson’s favourite Balearic retreat?

More From The Irish Examiner