BRITAIN’s First-time buyers were among those left shocked today after The Bank of England raised interest rates for the first time in a DECADE.
The Bank of England raised interest rates in response to the rising inflation seen over the past year.
The last time Britain saw an Interest rate rise was in 2007 back when Gordon Brown was the Prime Minister, but what does this mean for you?
IF YOU HAVE A MORTGAGE, THE COSTS WILL RISE
High street banks will start hiking mortgage payments – the first rise in a decade.
Change on variable rate mortgages
£225 + £6
£450 + £13
£675 + £19
£900 + £25
£1,125 + £32
£1,350 + £39
Yorkshire Building Society
All variable rate savings boosted by 0.25%. Yorkshire, Chelsea or Norwich & Peterborough standard variable rate (SVR) mortgage will see their rate increase by 0.25% to 4.99%. Accord Mortgages SVR from 5.34% to 4.99%, meaning borrowers on its SVR will see a reduction in monthly repayments.
Variable rates reset to August 2016 when the last cut was implemented. Savings rates are increased 0.15% and variable mortgages increased by 0.25%.
HSBC: Tracker mortgages up 0.25% from Friday. Savings accounts are under review.
Nationwide Building Society
Savings rates increased by 0.25%. Mortgage rates are increase – the society’s base mortgage rate is now 2.5% and standard mortgage rate is 3.99%.
Mortgages and savings accounts are now under review.
Lloyds/Halifax: Tracker mortgages will go up 0.25% from December 1.
RBS/NatWest: Base-rate linked mortgages are increased by 0.25% to 0.5%. Other variable rate products are under review.
Santander: All variable rate products are under review.
Skipton: Variable mortgages will be held at current rates while LISA savers will get a 0.25 per cent boost to their rate.
FOOD PRICES MAY GO DOWN
But it isn’t all bad news, the rise in interest rates may bring down inflation, that means cheaper goods and services from your weekly shop to the cost of clothing.
Mark Carney, The Governor of The Bank of England said: ‘It’s not so much where inflation is now, but where it’s going that concerns us.’
He added: ‘In many respects the decision today is straightforward: with inflation high, slack disappearing and the economy growing at rates above its speed limit, inflation is unlikely to return to the 2 per cent target without some increase in interest rates.
‘Of course, these are not normal times. Brexit will redefine the UK’s relationship with our largest trade and investment partner.’
‘With unemployment at a 42-year low, inflation running above target and growth just above its new, lower speed limit, the time has come to ease our foot off the accelerator.’
In a statement announcing the decision, the Monetary Policy Committee said its forecast was still that inflation was at its peak of 3 percent and that economic growth would be ‘modest’.
SAVERS WILL EARN MORE
The average easy-access savings account is currently paying 0.14% in annual interest, according to the Bank of England. So someone with £10,000 worth of savings is earning £14 a year. If the rate rise is fully passed on, they would earn an extra £25 a year, making £39 in total.
A saver with £10,000 in a typical cash Individual Savings Account (ISA) would see their income rise from £30 a year to £55.