As The Mirror reports, the Bank of England has raised interest rates from 0.75% to 1% “in order to help beat runaway inflation eroding consumers’ cash.”

This new increase means that the rate is now at its highest level since 2009. In other words, millions of people with mortgages and other kinds of debts will observe their payments increase as a result of the current situation.

„Prices are likely to rise faster than income for many people. That means that people will be able to buy less with their money” – a Bank of England spokesman told the British media.  

In the last weeks of 2021, the rate rose from 0.10% to 0.25%, then to 0.5% in February 2022, and even to 0.75% in March, to finally rise to 1% today.

According to the Office for National Statistics’ latest figures, the rate of inflation increased from 6.2% in February to 7% in March. The Bank of England even warned it could reach 10% by the end of the year.

Gemma Boothroyd, of investment firm Freetrade, argues that not all Britons will be impacted equally.

„The rate rise could ultimately ease inflationary pressures, or at least that’s the Bank of England’s goal. So theoretically, this could soothe some cost of living pressures we’re seeing across the board from energy price hikes to increasing costs of food […] But it could also mean homeowners with variable mortgages are forking out more every month” – she explained. 

Image: Unsplash

Author: Sébastien Meuwissen