Further Increase In Bank Rate
A few days ago the Bank of England increased the Bank Rate from 1% to 1.25% – a rise of 0.25%. A small increase but one of several we have seen in recent months.
Interest rates have been increasing to try to curb inflation that is on the rise. The cost of many things have been going up such as domestic and commercial gas and electricity prices, food and the cost of fuel at petrol stations to name but a few. It has been forecast that inflation could exceed 11% towards the end of this year. It is also predicted that interest rates could rise to as much as 3.5%.
So, how could higher interest rates affect people in the UK?
Well, residential mortgage rates are likely to increase as they tend to follow the Bank Rate. For instance, those customers with a variable rate mortgage are likely top se the amount they pay each month for their mortgage go up. Those on fixed rates will not see a change in their repayments until they come to the end of the fixed rate period.
Credit card companies may well increase the amount they charge customers. Interest rates on credit cards are already quite high when compared with some other forms of lending.
If you have an overdraft facility whether it be on a personal basis or for your business you are likely going to see the cost of such borrowing go up.
If you have a loan connected to the Base Rate then you will see the cost of the borrowing rise.
Let’s not forget savers. Those with monies in an instant access savings account are probably going to see the interest they earn go up.
Interest rates have not been as high as they currently are for 13 years.
We will endeavor to continue to keep our readers up to date should there be further rises in the Bank Rate.