The Bank of England has increased interest rates from 0.1% to 0.25%. This is the first UK interest rate increase since rates were cut to 0.1% in March 2020.
This rise in interest rates is manly an attempt to control recent rises in the cost of living.
The Bank of England’s Monetary Policy Committee (MPC), who set interest rates, voted 8 – 1 to increase rates.
This increase will be good news for savers, but less good news for borrowers. In particular this will be bad news for anyone with a mortgage which has a variable interest rate. The effect of interest rate increases will depend on each individual lender’s terms and conditions.
Although interest rates have more than doubled, they are still relatively low compared to historic rates. For example, in November 1979 interest rates rose from 14% to 17%.
Farrell Financial Planning are independent financial advisers (IFAs) based in Glasgow and do not give advice on inflation or future interest rate movements. However, we do offer independent mortgage advice.
Please feel free to explore our website and discover more about the advice services we offer.
All information is correct as at 16/12/21.