The Bank of England warns that interest rates may have to rise earlier than expected.
At the Bank of England’s latest meeting, policymakers voted to keep interest rates as they are at 0.5%. However, they agreed that rates would need to rise “earlier” and at a “somewhat greater extent” than they did during the last review in November.
Earlier this week, financial experts anticipated an imminent rise, estimating that it’d increase as early as the end of February. But following the Bank of England’s latest announcement, it seems May could be more realistic.
Following the Bank’s comments, the value of the pound jumped by around 1% against both the dollar and the euro.
Not only will an increase in the base rate have a large impact on the economy, it’ll affect people on an individual level, whether they’re savers or homeowners.
With approximately 8.1 million UK homeowners having a mortgage - and almost half having a standard variable rate or tracker rate mortgage - millions of people will face higher payments unless they fix their deal to a manageable rate.
Renters may also be affected too. If landlords fail to fix their mortgage, the rising cost of repayments may be passed onto their tenants.
Savers are likely to celebrate news of an interest rate rise as they may start to earn more from their savings than they have done in recent years.
In fact, banks may begin competing with one another to offer the most generous rates and attract new customers.
Are you concerned that your mortgage repayments may increase following an interest rate rise? Please get in touch with our team of mortgage brokers. We’ll help you determine the best course of action for you before highlighting the most suitable and affordable mortgage deals on the market.
