Interest rates to rise in August

The Bank of England is set to meet for interest talks surrounding concerns about rising inflation. The next announcement will be on the 4th of August, 2022. See how this could affect your mortgage.

The Bank of England's Monetary Policy Committee is meeting in early August to discuss a rise in interest rates. This comes at a point where inflation is reaching record levels and the cost of living is a topic on the minds of many. Inflation currently sits at 9%, and the Bank has warned1 that it could surpass 11% later this year.

Because of this, interest rates have moved from 1% to 1.25%, and the coming discussion will confirm if that is set to rise to 1.5% or 1.75%. While the rise in interest rates won’t necessarily help with day to day concerns, it could make your savings a little bit stronger, though the impact of this may not be all that significant.

It’s worth noting that banks are not strictly obliged to follow the Bank of England’s interest rate decisions, though many do, so check with your personal banks how their decisions impact your finances.

What this means is that, unless you’re on a fixed rate mortgage, you can expect to pay more on your mortgage repayments, since higher interest rates mean it’s more expensive to borrow money. According to a 2022 article by the BBC1, 74% of mortgage borrowers are on fixed-rate deals, which can make these higher interest rates easier to swallow.

That being said, if your fixed rate is set to expire after August 2022, you may need to consider your options. While you may not be able to do anything about the coming rise, there are precautions you can take for future increases.

Speak to a mortgage adviser or call us if you have concerns regarding your mortgage. They may be able to help you lock in a lower interest rate before the prices move up again.

1Bank of England, 2022

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