Bank of England raises the base rate to 5%
Thursday 22 June, 2023
The Bank of England has again raised interest rates in light of inflation stagnation. This is the 13th consecutive increase as the BoE continues to try to tackle inflation, which was unexpectedly stuck at 8.7% for May.
Many economists had expected the inflation figures to have fallen slightly. Therefore, the stagnation made it more likely for the BoE to announce the rise in the base rate from 4.5% to 5%.
With inflation rates remaining stubbornly high, raising interest rates continues to be the BoE's key tool to try to lower inflation. Some economists believe that there could be further increases in the base rate if the inflation rate remains too high.
These increases in interest rates are having a dramatic effect on mortgages, with many lenders rapidly withdrawing products from the market. Often, the withdrawal is made by the lenders with very little notice being given to the market.
These changes in rates and mortgage products reiterate our recommendation that speaking to a professional mortgage broker is vital when looking to renew your mortgage. Mortgage deals agreed in principle can be held in place for 6 months. This 6-month period will allow you the time to see how the mortgage market continues to change, with the potential of a better deal becoming available.
Tracy Dove, Financial Consultant and Mortgage Broker in Basildon and Exeter, said:
"With the Bank of England's sustained increases in interest rates, we are seeing the impacts within mortgage deals available on the market. We are experiencing the highest mortgage interest rates for many years. With so many fluctuations occurring in the market, anyone currently on a fixed-rate mortgage that is coming to the end of their mortgage deal, really should take action now. If their current mortgage deal is scheduled to end within the next six to eight months, then we strongly recommend that they speak to a professional mortgage broker for advice as soon as possible."
Thomas Oliver mortgage brokers appreciate that mortgage rate rises may have an adverse effect on your mortgage payments. We recommend that if you have been affected, then you should give us a call straight away to discuss your situation with one of our professional mortgage advisers.
Our team of expert mortgage brokers will be able to discuss your specific financial circumstances and help to answer any concerns that you may have.