Further Interest Rate Increase of 0.5 Percentage Points to 4.0%

CITY OF LONDON LOOKING TO THREADNEEDLE STREET AND BANK OF ENGLAND

The Bank of England's Monetary Policy Committee (MPC) met today Thursday 2nd February  2023, and set a further increase of the B.o.E. base interest rate of 0.5 percentage points to 4.0%.


Once again, this measure was done with a view to tackling rising inflation. Inflationary pressure is largely blamed on the War in Ukraine and the cost of rising commodity prices on the global markets following the global pandemic. 


Read the Bank of England's Monetary Policy Committee's Report for February 2023.


What does this mean for Trusted Xperts customers? Well in essence Mortgage Rates are rising fast with most providers removing their previous low cost deals. People on standard variable mortgages will see yet further increases in the repayments they make each month, following today's announcement by the MPC.


Customers who have 'Buy to Let' mortgages will be particularly at risk - because such mortgages are typically 'Interest Only Repayments'. This could have a knock on effect in the rental market space, as landlords consider increasing rents because of their increasing costs.


Trusted Xperts indicated in 2020, that was the time to consider taking out a new mortgage with historic low rates. Since then there has been a gradual increase and that has now culminated in another significant increase today.


We are in unprecendented times. Inflation although still persistently high in the UK, it has dropped slightly in December from 10.7% to 10.5% - indicating a potential slowdown and reversal. Will we continue to see further interest rate increases from the MPC in the coming months, as they grapple with a difficult economic picture for the UK?  That remains to be seen. Economic speculation seems to indicate at least one further interest rate ahead, so there is still argument to support that now still may prove to be the best time to secure a new mortgage - before the interest rate rises once again.


Andrew Bailey - the Governor of the Bank of England has warned British families face the longest recession since the financial crisis of 2008, and soaring prices.


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