A journalist at The Sun is after quick and snappy comment on whether the Bank of England will increase interest rates tomorrow — and what that will mean for household finances. Go go go. Just a few lines will do. No waffle!
11 responses from the Newspage community
"The Bank of England raising rates is a nailed on certainty. Its main job is to maintain inflation at 2% and it's currently way, way beyond that. Luckily, on the mortgage front, most people are on fixed rate mortgages, so they won't be impacted, for now at least. But a lot of people are going to experience a serious 'rate shock' when they next come to remortgage. We're also likely to see people who fix their mortgage rate fix for longer, as rates could rise quite a lot more in the medium term. The days of rock-bottom interest rates are over. Household finances are already being squeezed from all angles and interest rate increases could see the cost of servicing certain forms of debt rise. There could be a brutal few months, or even years, ahead."
"It's almost certain that the Bank of England will raise the base rate tomorrow. However, most people with a mortgage, who are tied into a fixed rate, will be protected — for now. In the main, mortgage lenders have already priced in the base rate rise over the past couple of weeks. So if you're sat on your lender's standard variable rate, there's a strong chance you'll see that rise in the coming months. If you're worried, as always, get in touch with a good local independent broker and remortgage now. These rate rises aren't going to stop any time soon."
"Raising interest rates to make borrowing money more expensive may be the right way to tackle inflation when people are flush with cash and pushing up inflation due to non-essential purchases, like holidays and new cars. But that's not where we are. We're seeing inflation rise due to the sharp increases in essentials like food, energy and fuel. Adding to the pain by increasing interest rates seems unlikely to have much impact, unless the aim is to stop people eating and heating their homes? Let's not forget we've seen an increase in national insurance this month, too, just to add more to the camel's back."
"It's odds on that the Bank of England will raise the base rate again this week. The Federal Reserve is expected to hike its base rate by 0.5%, and if we don't follow suit, Sterling will sink, stoking inflationary pressures even further. None of this bodes well for the housing market. Expect the phrase 'rate shock' to become common parlance in a year or two, when people come to remortgage and find they're paying an interest rate 3-4 % higher for their mortgage."
"I feel the Bank of England has no choice but to try and curb inflation by increasing interest rates. However, we do expect the Bank to do so cautiously, as UK households are squeezed by the rising cost of living crisis. This poses an even greater challenge to all those first-time buyers who are now up against rate rises and tighter affordability stress testing. But on the flip side, if this cools the market, the properties may become more affordable and available. It is a difficult juggling act for the Bank of England. For existing homowners struggling to make ends meet now, the impending rate rise is a concern. As a mortgage is usually the biggest monthly commitment speak to a broker now to see if this can be reviewed now to make this more affordable for you. We are already seeing homeowners with a heavy reliance on credit and finance to survive, and this may only get worse and will mean they are seeking adverse specialist lending when they come to remortgage if they do not review their finances with a qualified professional now."
"It looks very likely the Bank of England will raise interest rates on Thursday. One of their number one responsibilities is to keep inflation in check, even if that means triggering a recession. Anyone on variable rate mortgages or loans could see a quick impact of higher repayments and also anyone coming to the end of a fixed rate mortgage might now suffer higher rates."
"Increasing interest rates will increase the monthly mortgage payments of millions of hard-working people. Along with rising energy bills, and increased National Insurance payments, this could push many of them to the brink."
"If interest rates go up this week, households will suffer in the short-term. Mortgage payments will be more expensive, which in turn will mean people have less spare cash each month. Spare cash is already being squeezed as inflation is so high. Yes, savings rates will increase too, but not fast enough to keep pace with inflation. Should the Bank of England increase rates? Yes. But be prepared for some pain in the short-term."
"The market has priced a move to a base rate of near 2% so this rise will be the next and we are really only halfway there. The bad news is that the price is already baked into the mortgage products being offered so we've missed the bargain rate boat. The good news is that if these rate rises work then the mortgages being offered now should be there in the longer term."
"It would be very surprising if the Bank of England does not increase interest rates tomorrow. The cost of living will increase for those on a variable mortgage rate. Now is the time to fix if you are not planning to move."
"A rate hike is very much expected from the Bank of England tomorrow. It’s already priced, which means the pound is unlikely to strengthen against other currencies unless the hike is more than 25 basis points. A half per cent hike would be bullish for the pound. The press conference from the Governor of the Bank of England will give us clues as to when the next hike is likely, or if they’ll pause the hiking cycle. It wouldn’t surprise me if the vote tomorrow to raise interest rates by 25 basis points is a 7-2 vote split rather than the 8-1 vote split we saw the last time the Bank of England raised rates. Which means we could see one further interest rate increase in 2022."