Adam French, Head of Consumer Finance at Moneyfactscompare.co.uk, said:

“While the cost of living continues to weigh on household budgets, the latest inflation figures provide some small relief, especially for savers. The average savings account has moved from paying 0.34 percentage points below inflation last September to 0.99 percentage points above inflation today, a swing of more than 1.35 percentage points. For many savers, what matters most isn't whether savings rates rise or fall in isolation, but whether they stay ahead of inflation, and as things stand, they are doing just that and allowing many households to preserve or grow their purchasing power.

“Even more encouraging is that 1,960 open savings accounts are currently paying more than the Consumer Prices Index (CPI), giving many savers plenty of opportunity to shop around for the best deals and grow the real value of their money. The difference between an average account and one of the market-leading deals can amount to more than £140 on a £10,000 balance over a year.

“However, inflation is expected to begin creeping higher over the coming months as households face renewed pressure from a higher energy price cap and the potential economic fallout from a prolonged conflict in the Middle East. Any subsequent increase in inflation will squeeze household budgets further and reduce the real value of savings unless providers continue to offer competitive returns.

“This fresh uncertainty may make the top-paying easy access savings accounts a more attractive option. These accounts offer the flexibility to access funds should they be needed in the face of rising living costs, and those willing to shop around can take advantage of any further increases in savings rates if providers respond to changing inflation and interest rate expectations. In uncertain and increasingly volatile economic times, maintaining both competitive returns and financial flexibility is likely to be a priority for plenty of households.”