Bank of England increases base rate to 1.25%
On the day that the FCA issued their ‘Dear CEO’ letter to over 3,500 lenders, the Bank of England announced that interest rates would rise to 1.25%. At its meeting ending on 15 June 2022, the MPC voted by a majority of 6-3 to increase Bank Rate by 0.25%, to 1.25%. Those members in the minority preferred to increase Bank Rate by 0.5%, to 1.5%. I think most of us are expecting a continuation of this theme further into 2022 as further inflation increases are expected, consumer confidence is falling and GDP is negative.
The June rate rise means that homeowners with a typical tracker mortgage will have to pay about £25 more a month. Those on standard variable rate mortgages will see a £16 increase. About three-quarters of mortgage-holders have a fixed-rate deal, so have not been affected immediately. These need to be factored into horizon scans for annual review of debt solutions, which are becoming increasingly co...
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