Cashback Is King

Over the last 10 years, cashback products in the UK have become increasingly popular as a way for consumers to save money on their purchases. Worldwide tens of millions of customers use some of the biggest cashback websites with countless more choosing financial products that offer the opportunity to earn cashback through various day to day spending. Here are some notable cashback products and services that have emerged during this period:

1. Cashback Credit Cards: Several credit card issuers in the UK have introduced cashback credit cards. These cards offer a percentage of the amount spent as cashback rewards, which can be redeemed as statement credits or used towards future purchases.

2. Cashback Websites: Cashback websites like Quidco and TopCashback have gained significant popularity in the UK. These platforms partner with various retailers and offer cashback on purchases made through their links. Users can earn a percentage of their spending back as cash, which can be withdrawn or used for further purchases.

3. Cashback Mobile Apps: Mobile apps such as CheckoutSmart and Shopmium provide cashback on grocery purchases. Users can browse offers, purchase eligible products, and upload their receipts to receive cashback directly to their accounts.

4. Cashback Current Accounts: Some banks in the UK offer cashback incentives to customers who hold specific current accounts. These accounts may provide cashback on various types of spending, such as utility bills, direct debits, or shopping at partner retailers.

5. Cashback Energy Switching: Energy comparison websites like uSwitch and MoneySuperMarket offer cashback incentives to customers who switch their energy providers through their platforms. Users can receive cashback rewards when they switch to a new energy supplier.

6. Cashback Insurance Policies: Certain insurance providers offer cashback rewards to policyholders. These cashback incentives can be based on the number of years without claims or as a percentage of the premium paid.

7. Cashback on Travel Bookings: Some travel websites and platforms provide cashback offers for booking flights, hotels, or vacation packages. Customers can receive a portion of their spending back as cashback or rewards.

8. Cashback on Shopping Apps: Retailers and e-commerce platforms may have their own dedicated apps that offer cashback rewards to customers. These apps often feature exclusive discounts, promotions, and cashback opportunities for users who make purchases through the app.

It's important to note that the availability and terms of cashback products can vary over time, and it's always recommended to review the specific details and conditions of each cashback offer before participating. Offers change regularly too but cashback in recent years has been used effectively by some organisations as a great way to acquire new customers and to retain the existing ones.

INTEREST RATE LATEST NEWS (TAB):

Current Interest Rate: 5.25% (August 2023)

Next Due: 21st September 2023

Source: Bank of England – last updated 03 August 2023

Interest rates have gone up by 0.25% which is smaller than some economists predicted. This is the 14th consecutive increase and the highest they have been for some 14 years. However the rates are now in line with historical average and those that were normal before the 2008 Financial crash. Are interest rates going to stay at this level for years to come? Watch this space…

History of Interest rates:

Interest rates in the UK have experienced significant fluctuations over the past century, influenced by various economic conditions, monetary policies, and global events. Here's a brief summary of some key periods and trends:

1. Early 20th Century (1900s-1930s):

Interest rates were relatively stable during the early 1900s. Following World War I, interest rates increased to combat inflation resulting from war expenditures. The Great Depression in the 1930s led to a period of low interest rates as central banks aimed to stimulate economic growth.

2. Post-WWII Era (1940s-1970s):

After World War II, interest rates remained relatively low as governments focused on economic reconstruction. The 1950s and 1960s witnessed low inflation and stable interest rates. In the late 1960s and 1970s, rising inflation and economic challenges led to a significant increase in interest rates, reaching high levels by the end of the 1970s.

3. High Inflation and Volatility (1980s-1990s):

In the early 1980s, the UK faced high inflation and economic instability. To combat inflation, interest rates were raised significantly, peaking at around 17% in 1981. Throughout the 1980s and early 1990s, interest rates remained elevated due to continued efforts to curb inflation and stabilize the economy. By the mid-1990s, inflation started to decline, leading to gradual reductions in interest rates.

4. Low Inflation and Monetary Policy Framework (2000s-2022):

In the late 1990s and early 2000s, interest rates were generally lower due to improved inflation control and the adoption of an inflation targeting framework by the Bank of England. Interest rates remained relatively stable until the global financial crisis of 2008. In response to the crisis, rates were reduced to historic lows to stimulate economic recovery. Following the financial crisis, interest rates remained at historically low levels for an extended period to support economic growth and mitigate the impact of the recession.

5. The Recent Surge (2022-Present):

In early 2022 after war broke out in Ukraine and along with other contributory factors inflation rates started to increase quite quickly. Many central banks including the UK began to slowly increase interest rates from record lows. The rise has caused many people to rethink finances especially those of a younger generations who have only really ever known incredibly low rates.

It's important to note that interest rates are subject to frequent changes, and specific details, trends, and recent developments beyond this article in June 2023 would require accessing up-to-date information from reliable sources such as our monthly updates on MonthlyCashback or referring to central bank reports and economic data.

INFLATION RATE LATEST NEWS (TAB)

Current Inflation rate: 7.9% (July 2023)

Next Due: 16th August 2023

Source: Office of National Statistics July 2023

The inflation rate fell to 7.9% from a previous figure of 8.7%. this continues the downward trend from highs of 11.1% in October 2022. The main two contributing factors for the surge in the last year have been mostly down to the COVID-19 Pandemic and the war in Ukraine. The UK has lagged behind many of it’s other counterparts in being slower to tackle high inflation but things appear to be going in the right direction now.

What is inflation?

We see percentages and dramatic headlines about inflation rates all the time but what is the definition? The International Monetery Fund (IMF) defines it as:

Inflation is the rate of increase in prices over a given period of time. Inflation is typically a broad measure, such as the overall increase in prices or the increase in the cost of living in a country. But it can also be more narrowly calculated—for certain goods, such as food, or for services, such as a haircut, for example. Whatever the context, inflation represents how much more expensive the relevant set of goods and/or services has become over a certain period, most commonly a year.

100 years history of inflation:

Over the past 100 years, the United Kingdom has experienced varying levels of inflation.

In the early part of the 20th century, the UK experienced relatively low and stable inflation rates. However, following World War II, inflation started to increase gradually. In the 1970s, the country faced significant inflationary pressures, with inflation rates reaching double-digit levels. This period was characterized by a combination of factors, including rising oil prices, wage-price spirals, and expansionary fiscal policies.

In response to the high inflation of the 1970s, the UK government pursued a policy of monetarism in the 1980s, aiming to control inflation by reducing the growth rate of the money supply. This policy led to a period of declining inflation rates, although they remained elevated by historical standards.

During the 1990s and early 2000s, the UK experienced a period of relatively low inflation, with rates generally ranging between 1% and 4%. The Bank of England gained independence in 1997 and adopted an inflation targeting framework, aiming to keep inflation at a target rate of 2%. This framework has guided monetary policy decisions since then.

In the wake of the global financial crisis in 2008, the UK, like many other countries, faced an economic downturn. Inflation rates remained relatively high due to factors such as increased commodity prices and a weakened pound. Inflation peaked at around 5% in 2011 before gradually declining.

In the years after the financial crisis up to 2021 and early 2022, inflation in the UK has generally remained around or below the 2% target set by the Bank of England. The most recent surge to over 11% in late 2022 was Due to unexpected events such as Russias invasion of Ukraine earlier that year resulting in knock on effects of higher costs of transport/fuel/utilities. Shortage of workers partially due to Brexit are amongst other contributing factors being quoted within the media.

Inflation rates have started to come down in 2023 but it is taking longer than initially expected which is having an impact. To get the most accurate and up-to-date information on inflation rates in the UK, I recommend referring to the Bank of England or the Office for National Statistics, which regularly publish official data and reports on inflation.