Homeowners ‘shouldn’t rule out’ mortgage payment rise as Bank of England to raise rates

Martin Lewis discusses interest rates Homeowners are being warned that they ‘shouldn’t rule out’ another hike to interest rates from the Bank of England. Mortgage repayments have increased substantially in the past year in the wake of a series of rate rises from the financial institution. Next week, the central bank’s Monetary Policy Committee (MPC) will meet to discuss further changes to the base rate. As it stands, the Bank of England’s base rate is at five percent and has been raised to mitigate the impact of inflation on the economy. One of the consequences of the Bank’s decision is that mortgage and debt repayment have been raised to the detriment of millions of homeowners. Homeowners could see their mortgage repayments increased once again For June 2023, the Consumer Price Index (CPI) rate of inflation eased to 7.9 percent in what many consider a sign that the economy is improving. However, this figure remains far above the financial institution’s two percent target for inflation. Experts are sounding the alarm that further intervention from the Bank of England is likely coming as a result. James Smith, ING’s Developed Markets’ economist, shared why a base rate of 5.5 percent could be a possibility in next week’s announcement. The central bank has hiked rates to beat inflation SUBSCRIBE Invalid email We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info He explained: ‘Welcome news on UK inflation has taken a fair amount of pressure off the Bank of England to repeat the 50 basis point rate hike it implemented in June. ‘Services inflation, a key metric for the Bank, dipped back in June’s data, against BoE expectations for it to remain unchanged. That was complimented by better news in other areas, including food. ‘Admittedly this improved story on inflation was tempered by a recent upside surprise to pay growth, but that too was offset by further signs of cooling in the jobs market and an ongoing return of workers. ‘We shouldn’t rule out a 50 basis point hike though, especially if the committee concludes they think they’ll hike again in September.’ Trending