The Bank of England has raised interest rates by 0.25% to 4.5% as expected today, after a majority of the Bank’s Monetary Policy Committee (MPC), headed by Governor Andrew Bailey (pictured) voted for the increase again. This increase is the 12th successive rise, taking the rate to its highest level in almost 15 years.
The Bank is reacting to a stubborn inflation figure, which remains above 10% despite all the recent interest rate increases. All eyes will now be on the banks and building societies to see if they will respond to this increase, and raise mortgage rates in response.
Mortgage rates have fallen slightly recently after the chaos last year caused by the Mini-Budget in September. Since December 2021, the Bank has increased the interest rate from 0.1% to 4.5%.
The MPC says: “Higher interest rates mean higher costs for some people. We know that is not easy when there is already a lot of pressure on their finances.
“Our aim is to bring back low and stable inflation,” it says. “We expect inflation to then meet our 2% target by late 2024.”
“Low and stable inflation is vital for a healthy economy. An economy in which households and businesses can plan for the future with confidence and money holds its value.
“We expect inflation to fall quickly this year. We expect inflation to then meet our 2% target by late 2024. That doesn’t mean that prices will fall, but they will stop increasing so quickly.”
There has been a notable increase in the number of tenants being asked to provide a guarantor to secure a rental property, new research has revealed, as lack of supply and inflationary pressures push up average rental prices and landlords seek out additional assurances from tenants. Goodlord analysed more than 220,000 tenancies taken out between January 2020 and June 2023. Its...
Residential property transactions edged up 1% in March 2023 compared to the previous month, the latest HMRC figures have revealed. Across the UK, there were 89,560 home sales last month, according to the provisional seasonally adjusted estimate. While this was slightly higher than February’s total, it represents a 19% decline on the figure for the corresponding period of...
Banks and building societies look set to cut the costs of UK fixed-rate mortgages in the short- to medium-term after the International Monetary Fund (IMF) predicted that ultra-low interest rates will soon return with inflation due to fall sharply in the coming months. A number of homeowners have been hit hard by a steep increase in mortgage costs in recent months. But the Unit...