Why are Interest Rates in the UK going up?

Reasons the Bank of England interest rates are increasing?

One of the main reasons Bank of England may raise interest rates is to control inflation. When the economy is growing too fast, it can lead to higher prices and inflation. By raising interest rates, The Bank of England can slow down economic growth and reduce inflationary pressures.

Other factors could be -

1. To attract foreign investment:

Higher interest rates can make a country's currency more attractive to foreign investors, which can help boost the economy.

2. To promote saving:

Higher interest rates can encourage people to save more money, which can help increase the supply of loanable funds and lead to higher investment and economic growth.

3. To stabilise the economy:

The Bank of England may raise interest rates to stabilise the economy during a recession or financial crisis. Higher interest rates can help reduce volatility in financial markets and restore confidence in the economy.

What will happen to UK Mortgages?

We are seeing that a lot of lenders have prepared for a rise in Interest Rates so there is stability with Mortgage Interest rates. If you're on a variable rate your monthly payments may increase, if you're fixed into a rate this will not change until your term comes to an end. Your lender can advise when this will be.

If your mortgage rate is coming to an end within the next 6 months, please get in touch to discuss your options.

Thank You for reading,

Megan Hall, Cert CII (MP)