Kent residents face another hike in interest rates
Rising food and energy bills could affect households in Kent this summer as The Bank of England has voted to raise interest rates once again for the 12th consecutive time.
Following a meeting with the Monetary Committee earlier this afternoon, they have voted to raise the rate to 4.5% which is the highest it’s been in years.
The Monetary Policy Committee voted by a majority of 7-2 to raise #BankRate to 4.5%. Find out more in our #MonetaryPolicyReport: https://t.co/zsyOpkm1FD pic.twitter.com/8IgWOarj70
— Bank of England (@bankofengland) May 11, 2023
Mortgage and loan payments are expected to go up, as many people are struggling with the cost of living.
Interest rates are what gets charged on top of a loan, for example if the bank loans you £300 with a 5% interest rate you would have to pay them back £315. The bank sets the base rates, which influences the rates lenders charge on credit cards, mortgages, and loans.
Since December the rate has gone up by 4.25%:
Graph information sourced from The Banks of England
The interest rate increases to keep up with the rising prices, when covid restrictions lifted consumers were out spending more which put a strain on the economy and prices started going up. Raising interest rates encourages people to save money instead of spending it.
Inflation is too high. It’s been around 10% since last summer. Higher energy and goods prices are the main reasons why inflation is well above our 2% target. https://t.co/zsyOpkm1FD #MonetaryPolicyReport #inflation pic.twitter.com/rgfRVS4aGC
— Bank of England (@bankofengland) May 11, 2023
The Bank of England says: “The future is uncertain, so we can’t be precise about what will happen to Bank Rate in future.
“That will depend on what happens in the economy and what we think will happen to the rate of inflation over the next few years.
“Following the results of today’s monetary meeting, we will find out at the next meeting in June if rates will increase or decrease.”