Interest rate rise to 5% in further blow to borrowers
Last month I was predicting a 0.25% increase in the base rate, which was based on inflation behaving better. Unfortunately, that has not happened resulting in the 0.5% increase today.
The voting
There was a full committee of 9 for the vote. 7 voted to increase by 0.5% and 2 votes to maintain at 4.5%. The exact same voting pattern as last month.
| Member | Direction | Amount |
|---|---|---|
| Andew Bailey (Governor) | increase | 0.5% |
| Ben Broadbent | increase | 0.5% |
| Jon Cunliffe | increase | 0.5% |
| Huw Pill | increase | 0.5% |
| Jonathan Haskel | increase | 0.5% |
| Catherine Mann | increase | 0.5% |
| Dave Ramsden | increase | 0.5% |
| Swati Dhingra | Maintain | --- |
| Silvana Tenreyro | Maintain | --- |
Outlook
It is starting to feel like the only thing that will actually help us out of this is a recession. Strange to say but there you go. Inflation is not going down, simple as that. It is currently 8.7% which is saying that an item costing £1 in May 2022 now costs £1.08. Food prices did fall a little but used car prices and air travel went up.
If there is something we can be certain of, this is going to hit borrowers hard, especially as there are many, many borrowers coming off a low fixed rate < 2% about to be hit a new rate of up to 6% and quite frankly higher by the looks of it.
I really don't want to say it again but I have to! The pain is still not over yet!
Lee Wisener, CeMAP, CeRER, CeFAP
Having worked in the mortgage industry for over 20 years I have always wanted to build a website dedicated to the subject. Also being a geek when it comes to the internet all I needed was time and I could both build the site from scratch and fill it with content. This is it!
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