The interest rate has been raised to 3% – the highest level since the 2008 financial crisis.
The Bank of England’s 0.75% hike represents the eighth consecutive increase since December, pushing the rate to its highest level for 14 years.
It also marks the biggest single increase since 1989 and will have a big impact on the cost of living and people’s finances.
Mortgage holders, house hunters and savers will be affected by the Bank of England’s decision to increase the rate from 2.25% to 3%%.
Homeowners on Standard Variable Rates or tracker mortgages will be hit particularly hard in the short-term by the latest interest rate increase.
After a period of ultra-low rates, many homeowners are now facing the possibility of much more expensive monthly repayments.
The Bank’s rate hike from 2.25% to 3% means that those on a typical tracker mortgage will pay about £73.50 more a month. Those on standard variable rate mortgages would face a £46 jump.
Analysts suggest rates could reach 4.75% next year.
However, that peak is lower than predictions had suggested a few weeks ago, when the government was in some turmoil after its mini-Budget was badly received.
Comments (3)
This is going to be NASTY.
It’s a far cry from the huge interest rates in the past – 17% in 1980-1 and 15% in 1990-1.
You could blame the one in the 1980’s on the Labour Party under Wilson & Callaghan, but it’s more complicated than that. The Conservatives caused many of the problems that led up to it and Labour were unable to deal with it and exacerbated the problem.
However, the Tories were in control from 1979 to 1997 – the second one is definitely all of their making.
And here we are again. The Tories have been in control since 2010 and have mismanaged the aftermath of the credit crunch in a devastating fashion for the normal person on the street.
Plenty of people blame the Labour Party for the credit crunch which cannot possibly be true. It was a global phenomenon.
You might also say the same is true this time, but only if you believe our own press and Tory propaganda.
Europeans are looking on at us and cannot understand how we have managed to get ourselves in such a complete mess. They have their own problems but ours are extreme in comparison.
And the real problem is that we’ve had 15 years of super low interest rates. A whole generation has grown up on cheap finance and that’s unlikely to return soon.
In the last 12 months (or so) the BoE base rate has increased from 0.5% to 3%.
Rates for mortgage borrowers have gone from 1.5% to 6%.
A typical 2 bed flat where I work sells for £250k. Most buyers would need a £225k mortgage.
That means that average monthly payments have just increased by £550.
That’s on top of higher transport costs, higher food costs, higher heating & lighting bills.
The good (?) news about the historic interest rate hikes is that the average person in the country hadn’t borrowed themselves up to the absolute limit and whilst there was an inordinate amount of pain, a lot of people managed to grin an bear it. (Yes I know a lot of people suffered – I was an estate agent from 1991 onwards).
And the worst of it is that once again, the reason for the interest rate hikes is to curb inflation which once again has NOTHING to do with the average person and much more to do with our government being asleep at the wheel and mismangaing our economy into the ground.
We need a general election now!
Yes because the war in Ukraine has not affected any other country Just back from France and Germany prices for everything have shot up
If anyone thought low interest rates of 1% would last for ever they were stupid As someone who has savings and paid the mortgage off rather than spend it on loads of citybreaks and holidays and coffee shops I am delighted that rates have gone up
So whe n the is a worlwide economic probelm when Labour are in pwoer it is not their fault even though Darling left a note to say he had spent all the money
When the Tories are in power its all propoganda
Grow up FFS
Yiu support a party that expects tax payers who work hard to look after scum like Shamima begum
w++++r
Jan, might I point you to the Wikipedia entry for Informal Fallacy…? I count at least four which rather makes your opinion somewhat worthless.
I have read your posts on PIE for a while now and you have a habit of being fairly toxic in your responses.
Using “FFS” and “w++++r” are typical examples.
Did you type the full word or did PIE edit it for you? I’ve never tried to post a rude word on here before.
There are only 81 words in the English language that have that format and only one of them is an unkind epithet that would need to be hidden. BTW, it scores 13 in Scrabble.
If you had paid attention to more of my own posts in detail you would know that I advocate for proportional representation so we can get rid of the excesses of both political parties. I don’t like any of the political parties in the UK.
But if you look at their track records then wealthy people like you have had a reasonable time under Labour and a fabulous time under the Tories whilst poorer people have benefitted a bit under Labour and been utterly devastated by the Tories.
Capitalism is great, but for a country to work you really do have to bring the whole population along with you. Leaving some behind has been proved not to work for 60 years now in the UK and in many others around the world for decades.
What is required is a bit of social justice and dare I say it some “levelling up”.
However, the idea of “levelling up” has been hijacked as a Tory mantra and is now used as propaganda whilst they do the complete opposite.
Anyway, please do have a nice day. You’ll note that I haven’t needed to resort to unkindness or unpleasantness in any way to make my point…