Published: 03/02/2023 By Allan Fuller
The Bank of England has just announced the 10th interest rate increase in a row to now 4%, it is a blow to anyone not on a fixed mortgage rate. If you are struggling you must contact your lender immediately, they will generally try to help you.
It has taken this action in its battle to bring down soaring inflation. Interestingly it was not a unanimous decision by the Bank’s Monetary Policy Committee, they voted by a majority of 7–2.
It is not just the UK, the US Federal Reserve opted to raise rates by 0.25 percentage points on Wednesday from 4.5 to 4.75pc, Fed chairman Jerome Powell said the bank had “more work to do” to bring inflation back to its 2pc target. The European Central Bank is expected to also raise its rates for much the same reasons.
There is however Good News, Bank of England is now predicting a shallower recession than had been feared. Inflation has in fact come down slightly for two consecutive months and sits at 10.5pc. The bank, and the government are both predicting inflation coming down dramatically by the end of this year, that should bring rates lower, so there is a light at the end of the tunnel.