Interest rates pushed up to 5.5%
Homeowners were dealt more mortgage pain today after the Bank of England raised interest rates to their highest point in six years.
The Bank's Monetary Policy Committee (MPC) hiked its base rate from 5.25% to 5.5%, the fourth quarter-point rise since August. The move had been widely expected after inflation hit 3.1% in March, forcing the Bank's Governor to write an explanatory letter to the Chancellor for the first time. The increase is likely to add an estimated £16 a month to the average mortgage bill for households with a typical £100,000 mortgage. Economist Philip Shaw at Investec Securities said: "The quarter-point increase is no surprise and comes against a background of rising inflationary pressure. We expect a further increase to come, to take base rates to 5.75%.".
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