The Bank of England has taken the historic decision to raise the base rate from 3.5% to 4%, the highest level for over a decade and bringing a wave of financial insecurity to those with mortgages and other loans. This could mean an additional £10 per week on average for non-fixed mortgage holders, while store cards, credit cards and car loans are all likely to see their rates increase soon after.
Wealthier people with money in the bank may benefit from better savings rates, although these will still be eroded by inflation. Tenants could also suffer as landlords try to meet the cost of the base rate rises by raising rents, while buyers looking to purchase property may find it increasingly unaffordable as the cost of mortgages rise ontop of the lowest volume of approval rates for over a decade.
Ultimately, this is a difficult time for everyone in the country, and the Bank of England’s decision to raise the base rate is an attempt to fix the economy. This could lead to an increase in unemployment and business closures, but it will also help the country’s economy in the long run. It remains to be seen whether these measures will be successful in the short term, and it is certain that no one will benefit from this decision except for those with large savings.