Interest rates are set to rise AGAIN with Bank of England taking base above 1 per cent

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Interest rates are set to rise AGAIN with Bank of England taking base above 1 per cent for the first time since 2009 in bid to tackle rampant inflation

  • Interest rates have bumped up rates four times since December
  • Prices jumped by 9 per cent, the highest rate of inflation since the 1980s
  • if rates hit 1.25 per cent, this will add £18 a month to a £150,000 mortgage 

The Bank of England is poised to raise interest rates again today as it tries to get a grip on rampant inflation.

Officials on Threadneedle Street have already bumped up rates four times since December in an unprecedented fight against the rising cost of living.

Prices jumped by 9 per cent in the year to April – the highest rate of inflation since the 1980s.

But a further hike today, taking the Bank’s base rate above 1 per cent for the first time since 2009, will pile more pressure on mortgage holders and other borrowers as the cost of their debt creeps up.

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If the Bank bumps up rates to 1.25 per cent, this will add another £18 per month on to the cost of a £150,000 variable rate mortgage, according to personal finance site Moneycomms.

Interest rates are set to rise AGAIN with Bank of England taking base above 1 per cent

Another interest rate hike from the Bank of England would be a ‘hammer blow to households up and down the country who are facing a tsunami of increased costs for essential goods and services’

Compared with last November, when the base rate was at 0.1 per cent, owners would be forking out an extra £87 per month. And if officials decide to take the more unusual step of pushing up rates by 0.5 percentage points to 1.5 per cent, in a more aggressive effort to bring down inflation, the squeeze will be even more obvious.

Andrew Hagger of Moneycomms said another rise would be a ‘hammer blow to households up and down the country who are facing a tsunami of increased costs for essential goods and services’.

Officials on the Bank of England’s rate-setting monetary policy committee will have been keeping a close eye on the latest decision from their American peers at the Federal Reserve last night. As anticipated, it decided to bump up rates by 0.75 percentage points.

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