Bank of England raises bank rate

The Bank of England has raised the official bank rate from 0.25% to 0.5%.

The decision, which was passed by the central bank’s Monetary Policy Committee by 7 votes to 2, is the first rate rise in over a decade.

Governor of the Bank of England Mark Carney stated that Brexit negotiations would play a crucial role in shaping future monetary policy and that future rate rises were likely in order to return inflation to the Bank’s target 2%.

Whilst the rate rise is good news for savers, there are concerns about the impact on those that are currently just about managing.

Debt Advice Foundation CEO David Rodger said ‘Clearly, any rate rise is bad news for those that are already financially struggling.  Not only will this increase be passed on to borrowers of unsecured credit, such as credit cards and overdrafts, but almost half of existing UK mortgages are standard variable rate or tracker rate, which will both be affected.”

“With clear signals being given by the Bank of England about further rate increases, it’s crucial that anyone that is struggling seeks independent advice about their finances from a qualified adviser.”