>Change in interest rates

Last week the Bank of England once again increased interest rates by another 0.5%, bringing the overall rate to 2.25%. It was advised that the Bank of England will ‘not hesitate’ to increase rates further following the change in the value of the pound. The target of a 2% inflation rate has not been met as ‘prices are currently rising at about five times that level’ and therefore interest rates are increasing.

How will this directly affect you?

Mortgage rates and therefore monthly repayments will increase unless you are locked into a fixed rate loan. However, when you try and find a new deal, you will also have increases in your monthly repayments. Some mortgage companies have withdrawn their deals already, with around ¼ of mortgage products taken down, giving those trying to find a new mortgage, a re-mortgage, or looking for a new fixed rate deal harder.

Credit cards, car loans and bank loans could also see their monthly repayments increase. “Even ahead of the latest decision, the average annual interest rate in July was 19.9% on bank overdrafts and 18.57% on credit cards.” (BBC.co.uk, September 2022).

There will also be an increase on the interest you occur on your savings account, however these are not in line with the increase of the cost of living.

READ MORE: https://www.bbc.co.uk/news/business-57764601