CPI shows deflation of 6.5%, even the EU harmonised measure is -3%. Yet it is easy to get 3.5-4% for deposits. Last year I stached away as much as possible in 6% one year term accounts, so over the year I got +6% when inflation was -6%. Even allowing for DIRT there is a substantial gain. Now some of this is illusory as deflation is driven by food price falls and you don't really put money in term accounts to buy food. However people saving for houses have a real gain, something that hasn't happened since 1992.
Will real interest rates ever be so high again?
Will real interest rates ever be so high again?