Bank of England Interest rate rises by 0.5%
Thursday 4 August, 2022
The Bank of England (BoE) has raised the interest rate by 0.5% to 1.75% in its continued attempt to rein in the increasing inflation rates. This is the largest rate increase in 27 years.
With inflation predicted to reach 11% later in the year, and others even predicting the inflation rate may reach to a staggering 15% at the beginning of next year, the Bank of England are under increasing pressure to regain control.
Bank of England Statement
In their press release, the BoE said of the interest rate increase “The Bank of England’s Monetary Policy Committee (MPC) sets monetary policy to meet the 2% inflation target, and in a way that helps to sustain growth and employment. At its meeting ending on 3 August 2022, the MPC voted by a majority of 8-1 to increase Bank Rate by 0.5 percentage points, to 1.75%. One member preferred to increase Bank Rate by 0.25 percentage points, to 1.5%.”
Review your mortgage
As a result of this increase, it is highly likely that your mortgage will continue to be the biggest outgoing you have on a monthly basis. To help buffer against the impact of the interest rises, it will be important to review all your monthly expenditure, but your mortgage is a good place to start.
There is an increasing number of clients that are now having to review their current mortgage as they have reached the end of their fixed rate mortgage product, or they will be ready to remortgage within the next 3 to 6 months.
With the continued upward trend of the interest rates, we are recommending to our clients that they review their current mortgage to determine if there is now a better product available to them, or indeed to limit the effect of further interest rate increases in the future.
Be ready to make the move to a new mortgage, act now and call our expert mortgage brokers on 01707 872000.