Bank Of England Raises Interest Rates 0.5% To 5% - Highest Since 2008
In the News
The Bank of England have just announced it has increased the interest rates by 0.5% up to 5% which is now the highest interest rate since 2008. There were rumours that they were raising them 0.25% but they opted for a half a percent. The vote was 7 - 2 in favour of half a percent increase and there are rumours that it could reach 7% by Christmas after this 13th consecutive increase.
I can't believe that 9 months ago I posted a very similar topic where the rate had increased from 1.75% to 2.25% after a shock 0.5% increase! >> www.latestdeals.co.uk/chat/bank-england-rises-interest-rates-225-highest-2008
The UK's rate of inflation is staying steady at 8.7% which is 6.7% ABOVE the governments 2% target rate so its clearly not working and just hitting people in the pocket who are already struggling to keep a roof over their heads and pay ever increasing food and energy bills.
Has this latest increase affected you or are you on a fixed mortgage coming to end soon? Only 15% of mortgage holders are on deals linked to variable rates - compared to 70% 20 years ago.
We are on variable but near end of term in 2025. Not sure how will be affected yet considering all the other rises. Probably struggle a bit more than we would have done.
It's got to stop. It's not OK to be honest. It's causing stress for families and anyone on a low of lowish income
I remember having a 13.5 interest on our mortgage. Hope it NEVER gets that high again. I was listening to radio ear and Liberals want to help those coming to the end of their fixes, no mentabout everyone else!
Pjran I remember those times as well, but house prices were a lot lower. The average house price in the UK, today is over £250k, so I don't even want to think of the impact this will have.
beccatavender earnings were lower and you could only borrow two and half times annual salary, three if you were prepared to stretch yourself.
Pjran But as a % of earnings home ownership was an option. At today's house prices, I couldn't afford to buy. Assuming the same rules apply you would have to an income of over £80k to afford a house.
beccatavender there was a report stating there are more people renting than buying so who will help them when their rents increase? It’s a vicious circle.
This is irresponsible especially when they know the effect the cost of living has on people struggling with mortgage repayments. People have stretched themselves just buying a property, this is also going to impact the rental market as landlords pass on the costs. Very depressing news.
It is only at an average rate at the moment, too much cheap money for too long has set the perfect trap to claw back working peoples gains.
It seems strange to be back at the April 2008 rate which was when I had my mortgage offer which unfortunately was fixed at that time at 6.5% everything crashed and a few months later the bank rate started to fall significantly. I knew it would go up but I didn’t think this and the previous time. I don’t understand how it helps if people’s mortgages and rent are going up then they need wage rises and then prices continue to increase it doesn’t solve anything and for those people who wages don’t go up they have no disposable income so are just working for bills and if people can’t afford treats or go out, businesses and ultimately staff suffer reduced hours etc
It doesn’t make any sense to me
Most people are going to be a lot poorer in the future with their disposable income reducing a huge amount. Some may strike which could kill the company they work for and leave them unemployed in the middle of a deep recession with few job opportunities. For the last 40 years we have become a economically moronic country both the politicians and the people sadly.
Until we return to a a trading surplus and live within our means we are just going to pile up more and more problems on ourselves. If you have high inflation then increasing interest rates will curb inflation but with less money being spent the economy shrinks and goes into recession. If you don't increase interest rates inflation increases causing recession with reduced spending. It's catch 22 with high inflation. All roads lead to recession.
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