UK interest rate rise: What does it mean for you, inflation and mortgages?
The Bank of England today has raised base rate by half a percentage point from four and a half percent to 5%. That's another bumper rise and comes despite major concerns on the impact on mortgage borrowers. Why is it doing this? Is doing it to combat inflation. Now, inflation is meant to be around about the target level of 2%. It's spiked over the last year and a bit to more than five times that into double digit territory. It's fallen out of that territory since then. But the bank is concerned that inflation is not falling fast enough and that there are still many inflationary pressures. It can't do anything about the inflation that we've seen already that's in the past. What it's trying to do is crack down on inflation in the future and stop it becoming embedded in the economy. And inflation remaining high for months or even years to come.
