Interest rates expected to be held again by Bank of England
Summary
The Bank of England is expected to keep its interest rate at 3.75% for the fifth time due to global political and economic uncertainties. This rate influences borrowing costs for loans and mortgages and helps control inflation, which is currently above target.Key Facts
- The Bank of England’s interest rate is likely to stay at 3.75%, unchanged for the fifth time.
- The Bank’s Monetary Policy Committee meets eight times a year to decide interest rates.
- Inflation in the UK was 2.6% in the year to June, slightly above the 2.3% target.
- Inflation may rise in July because of a 13% increase in domestic energy prices.
- The rise in energy prices is linked to the Iran war affecting wholesale energy costs.
- Most mortgage holders have fixed-rate deals, but new fixed-rate mortgage rates are rising.
- The average two-year fixed mortgage rate recently hit 5.62%, the highest in over a month.
- The Bank of England predicts that by the end of 2028, over five million homeowners could see higher mortgage payments.
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