![]() When the Bank of England changes the base rate some mortgage rates will move, but not all.įixed deals will remain at the same level until they finish, base rate trackers will move by the same amount as the Bank's shift, and standard variable rates or other deals linked to them will move by an amount decided by the lender. The Bank of England has raised its benchmark Bank Rate - commonly known as base rate - all the way from 0.1 per cent at the end of 2021 to 4.5 per cent in May 2023 Base rate vs mortgage rates In theory, this should eventually reduce consumer prices index inflation, which is currently way over the Bank of England's 2 per cent target at 10.1 per cent in April 2023, according to the ONS ![]() The idea is that by raising base rate, it raises the cost of borrowing and that reduces demand for it from consumers, households and businesses, which slows the economy down. The move up comes as the Bank of England’s Monetary Policy Committee – the group of expert economists who vote on what the base rate should be – looks to try to get inflation under control. The most recent rise came on Thursday,, when the Bank's rate setters added another 0.25 per cent to take base rate from 4.25 per cent to 4.5 per cent. It is expected to rise again but analysts are divided on how many more rises will come - and some think the Bank could stall here. The Bank of England’s base rate, officially known as Bank Rate, has rocketed up from 0.1 per cent in December to 4.5 per cent now.
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