The Bank of England has increased the base rate from a record low 0.25% to 0.5%, for the first time in the last decade.
The first increase since 2007 isn’t expected to have a huge impact on homeowners, as many have fixed rate mortgages and the cost of the increase is relatively low for those on variable deals. However, this increase in interest rates may only be the first of more to come, although the Monetary Policy Committee stated that any future increases would be limited and gradual.
Seven out of nine MPC members voted for the rise, stating that it was “appropriate to tighten modestly the stance of monetary policy” in order to bring inflation down “sustainably to target”. The main reason for the committee agreeing to increase the base rate was that inflation had risen above the target of 2%, forecast to rise to 3.2%.
Any increase which takes inflation to more than 1% above the target means that https://www.beaconfinancialtraining.co.uk/wp-content/uploads/2020/06/cemap-online-and-classroom-training-uk.jpg Carney, the Governor of the Bank of England, has to provide a written explanation to Philip Hammond, the Treasury chief.
For many adults in the UK, this will be the first interest rate increase which they have witnessed, and acts as a reminder that interest rates can increase as well as decrease. Mortgage advisors learn about interest rates and how they can impact on a homeowner, during their study on a CeMAP training course. They learn how to provide the most suitable advice for borrowers, while staying abreast of developments in the world of finance.
