The bank of England has announced today that they plan to increase the interest prices to the highest in 13 years. This increase is 0.75% to 1%. Mortgage holders, house hunters, and savers will be affected by the Bank of England’s expected decision to increase the rate from 0.75% to 1%.
This decision has been made due to the government trying to tackle the current inflation surge. This rise has been defended as a way of stopping inflation from getting out of control as it reached 7% in March, more than three times the Bank's target of 2%. It is predicted by the bank that inflation may hit 9% in the coming months, this is a rise from its previous 8%, and is predicted to reach 10.25% by the end of the year.
There has been a large impact due to the Ukraine war on household gas and electricity prices. Due to this, there was a recent increase in the energy price cap in April and this is expected to further rise in October. Which could result in a push in household bills up to £2,800 a year. The effect will be hard on homeowners and businesses during hard times, with the current surging energy, fuel, and food prices.
(source: property Industry eye, BBC)