Bank of England increases interest rates to 0.5%
The Bank of England has increased interest rates from 0.25% to 0.5%. This is the second UK interest rate increase in a row.
This rise in interest rates is manly an attempt to control the recent spike in the cost of living.
The Bank of England’s Monetary Policy Committee (MPC), who set interest rates, voted 5 to 4 to increase rates. (The MPC are scheduled to meet 8 times per year.)
This increase will be broadly welcomed by savers, but is not 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 increased by 400% since November 2021, 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 03/02/22.