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Bank of England Base Rate Increase to 4.25%


The Bank of England Monetary Policy Committee today voted by 7-2 to increase interest rates by a further 0.25% to 4.25%.

This is the 11th successive increase and takes rates to their highest level since 2008.

Andrew Montlake, MD of Coreco Mortgage Brokers comments, “They say a week is a long time in politics, but a day is an aeon in the financial markets.

“In the past few days, we have seen the contradictory effects of a banking drama pushing rates down on the one hand, and the surprise rise in inflation pulling in the opposite direction.

“These opposing forces left the Bank of England with no real choice than to increase rates as expected by 0.25%, with doing nothing not an option and 0.5% going too far.

“What happens next is up for speculation, but I do believe that the Bank of England should now take a proverbial time-out and give both the public and the markets time to breathe and settle. A period of calm is imperative, and rate rises take time to filter through and have an effect.

“There is a saying I have heard recently that central banks tend to go too far and only stop when something breaks. Potentially we are at that point now.

“I do believe that rates will indeed fall at some stage, but the stage is not quite now, and when they do it will not be as quickly or as far as many hope.

“This rollercoaster of ups and downs could continue for some time yet, with 4% being a consistent average as it always traditionally was, with those waiting for big falls likely to be disappointed.”

Some figures

On a £300,000 loan with a 20-year term remaining and currently paying 3.5%:

  • On a repayment mortgage a rise of 0.25% will mean going from £1,739 per month to £1,778 – a rise of £39 per month

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Andrew Montlake

Written by Andrew Montlake

Andrew Montlake, better known as Monty, began his journey with an Hons degree in Economics & Politics before starting in the mortgage industry in February 1994. As a main founder of Coreco in 2009, he successfully grew the brand, marketing, and communications, and was made MD in 2019 focussing on the overall vision, strategy, and culture of the company. As Coreco’s media spokesperson, Andrew can often be seen or heard on TV and radio as well as regularly commenting in the national, local, and trade press. He is the author of this acclaimed Mortgage Blog and is well-known for his social media, podcasts, and public speaking. Andrew is now proud to serve as Chairman of the Association of Mortgage Intermediaries, (AMI) as a cheerleader for the Mortgage Industry as a whole and continues to work at the coal face, writing mortgage business and advising clients.

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