Many households and homeowners in the UK have already been pushed to the financial brink over the past year, with the effects of the fifth interest rate rise in a year taking its toll at the moment, and many mortgage payers struggling to keep up with rising repayments. Interest rates have gone from 4.5% since lat August to 5.75% by this July after a series of five 0.25% interest rate rises in the space of a year. According to some analysts it may not be over yet.
Following the release of minutes from the last Monetary Policy Committee meeting in July, a number of analysts and economists are now predicting a further interest rate rise of at least 0.25% in September, which would take the base rate up to 6%. The base rate already stands at its highest in the past six years. Those on variable rate mortgages will then have to face yet another rise in repayments, which could tip many over the edge in terms of finances according to officials.
Reports indicate that core inflation is at a ten year high, and that headline inflation has not fallen adequately, which signifies the need for another hike in interest rates.
One analyst stated: “CPI figures suggested core inflation pressures continue to build while energy and food prices remain under upward pressure from wholesale market developments and adverse weather. We therefore look for a further rate move in September, taking rates to six per cent.”
The latest MPC meeting minutes showed that the last interest rate rise was pushed through with a vote of 6-3, and this is partly what has given rise to predictions of further interest rate rises in the next couple of months.
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UK homeowners with variable rate mortgages have had a rough twelve months, with five interest rates of 0.25% having been applied to the base rate since August of last year, taking the base rate from 4.5% to 4.75%. many homeowners on variable rate loans have seen their repayments rocket over the past year, and this has put a large number of homeowners in a difficult position, as they are struggling to keep up with repayments on their home, and, as predicted by many experts and industry officials, the level of repossession taking place has rocketed. Read the rest of this entry »
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