moneysupermarket.com: A&L's eSaver hitting 6.56 per cent

Commenting on A&L's eSaver hitting 6.56 per cent, Kevin Mountford, head of savings at moneysupermarket.com, said: "Consumers continue to live under the spectre of inflation and, while things haven't got much worse recently, neither have they improved, so the economy isn't getting the boost it needs. As a result it's likely the Bank of England base rate will linger at five per cent for a little while longer to hold inflation at bay while the MPC decides what to do next.

"While this isn't wonderful news for homeowners, it's certainly not dampening the battle for retail savings inflow. Today's move by A&L means it leapfrogs Kaupthing to top of the easy access table, although this account does carry a bonus and some penalties for withdrawals.

"The bigger picture though is what it means in the battle between foreign and UK banks for savers' cash. The recent increases from Kaupthing on easy access and ICICI on bonds caught the market a little cold, raising the bar with 7.2 and 6.55 per cent respectively.

"While A&L's move could represent the first stage of a comeback by UK banks, it is only a matter of time before it becomes a foreign bank due to the planned takeover by Santander. Savers should pay less heed to this for the moment as A&L, in its current form, is showing no sign of reining in its desire to acquire new business. A&L presents a strong alternative in the short-term to the overseas operators that still tend to dominate top spots."