The Bank of England has raised interest rates for the first time in more than three years in response to calls to tackle surging price rises.
The interest rates increase to 0.25% from 0.1% came despite fears that the Omicron variant of the coronavirus (COVID-19) could slow the UK economy by causing people to spend less.
The cost of living rose by 5.1% in the year to November, the latest figures from the Office for National Statistics (ONS) show. That was the highest rate since September 2011 and well above the Bank’s 2% inflation target.
Commenting on the interest rates rise, Charles Roe, Director of Mortgages at UK Finance, said that the ‘interest rate increase marks a rise from historically low levels’. He continued: ‘Over 74% of mortgage customers are on a fixed rate product and will see no immediate change to their mortgage payments.
‘For those who have come to the end of their deal, a wide range of mortgage products are available and we encourage homeowners to shop around and choose the best one for their circumstances. Any customers with concerns about managing their mortgage should contact their lender who will be able to explore the range of individual support options available.’
|Need help with your accounts? Please do not hesitate to contact us.|