Bank of England keeps interest rates at 5.25%
The Bank of England has announced it’s keeping interest rates at 5.25% for the fourth time in a row today.
Keeping borrowing costs at a 16-year high is designed to make people spend less and in turn bring prices and inflation down.
Inflation is currently sitting at 4% following a slight rise from 3.9% in December.
Although still double the government’s target of 2%, this is significantly below the high of 11.1% seen in October 2022.
As inflation continues the downward trend, it’s widely expected that interest rates will start to fall in early summer.
This might be of little comfort to homeowners with fixed-rate mortgage deals due to end shortly though.
Although the average two-year fixed rate has fallen from a peak of 6.86% in July last year to just over 5.5% - this is still significantly higher than the 2.34% seen in December 2021.
If you’re worried about rising mortgage costs
Lenders are expected to support customers in financial difficulty. They need to consider a range of options if you're struggling, including offering a period of reduced monthly payments or extending the term of your mortgage.
So, the first step if you’re worried about making your mortgage payments is to speak to your lender to see how they can help. You can find more information in our guide on what you should do if you fall behind with your mortgage payments.
If you’re struggling to pay your rent
If your landlord wants to put your rent up in response to rising interest rates, it’s good to know your rights. In most circumstances, your landlord can only raise your rent once a year and the increase has to be reasonable. Find more information on your rights and what to do if you’re struggling to pay.
For budgeting ideas and information on getting support if money worries are affecting your mental health, check out our blog on how to manage rising rents and mortgage interest rates.
And if you need debt advice, we're always here to help. You can access our advice online or over the phone.
A qualified journalist for over 15 years with a background in financial services. Rebecca is Money Wellness’s consumer champion, helping you improve your financial wellbeing by providing information on everything from income maximisation to budgeting and saving tips.
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