The Bank of England is expected to maintain the current base rate of interest at its meeting this week (July 8th), meaning investors are likely to continue to get low rates of return on their cash.

Charles Davis, managing economist at centre for economics and business research, said rates are likely to remain at 0.5 per cent in July due to the recovery being at an early stage and the tightening of fiscal policy in the coming months.

There is fairly strong case to keep monetary policy looser for longer as long as there is that fiscal policy focus, he added. The Bank's monetary policy committee has held the base rate at 0.5 per cent since March 2009.

A recent report from Moneyfacts suggested that people investing money in fixed-rate bonds are receiving 23.3 per cent less in interest than their investment would have generated nine months ago.

The average rate on a one-year bond is 2.62 per cent, which is well below the 3.4 per cent level of CPI-linked inflation, according to the Office for National Statistics, meaning the value of money invested in such products could be reduced.