Despite issuing warnings of a possible incoming recession and despite pressure from government officials, the Bank of England has announced that their base rate has risen to 1%, the highest its been since the pandemic began and also a 13 year high. It is also the fourth consecutive increase as the bank continues to move against surging inflation.
The bank, based out of Threadneedle Street in London, cites the fallout of the pandemic and also the conflict between Ukraine and Russia as major factors in its decision to raise the base rate. The Bank’s monetary policy committee also voted to increase interest rates by a quarter percentage point to 1%.
Three of the nine members voted for an increase of half a percentage point, and the Bank said “most members of the committee judged that some degree of further tightening in monetary policy might still be appropriate in the coming months.”
What does this mean for your mortgage? If you have your mortgage fixed then your rates and repayment won’t immediately change however interest rates will almost certainly increase again meaning that when you do come to remortgaging, your products and payments will most likely be higher. If you do not have a fixed rate mortgage and are currently on the standard variable rate or a tracker mortgage, this is directly influenced by the base rate change and your monthly payments will go up immediately.
If you want to know more about the base rate increase and how this might affect your mortgage, give our team of advisors a call on 02088771169 today.