The Bank of England (BoE) will announce the results of its latest review of the Base Rate today - which will have a direct effect on the country's economy.
The rates introduced by the Bank will have a direct impact on other rates across the country. It can affect how much someone will pay back on loans, mortgages, or savings accounts.
Over the past year, the Bank has been steadily raising interest rates in order to drive down inflation. Currently, inflation stands at 10.5 per cent, however, the Bank wants this to drop all the way to 2.5 per cent.
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Today, the Bank will announce the new interest rate following a meeting which will presumably take place in the morning. Previous decisions have usually been announced from 12pm, therefore, we can expect the new interest rate to be announced anytime around midday.
Will interest rates increase again?
While it is highly likely that interest rates will increase today, this is not a guarantee. On December 15, 2022, the Base Rate rose by 0.5 percentage points to 3.5 per cent.
Prior to this, on November 4, 2022, it rose by 0.75 percentage points from 2.25 per cent. BoE governor Andrew Bailey said last week that inflation might have made a positive turn after it feel in both November and December.
Despite this, it is still set at five times more than the BoE's target of 2 per cent. Some economists have predicted that the Base Rate on February 2 could go up between 0.25 and 0.5 per cent.
What will happen to my money if interest rates go up?
Interest rates will have a direct effect on those with a loan or a mortgage with a variable interest rate. If the interest rate goes up, you may notice that the cost of your repayment will go up as well.
However, if you're on a fixed rate, you won't see any changes to your payments until the end of your fixed period. If you're concerned about how high your monthly payments could go up, you can use a mortgage calculator to better prepare yourself.
Furthermore, if your saving account pays interest, you might see interest rates on your savings going up.
When will interest rates change again?
The BoE reviews interest rates every six weeks. This means it will change again in mid-March. However, it is not yet clear if they will go up, down, or stay the same during that period.
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