Interest rates rise

Credit card and mortgage holders and those with loans have been hit with yet another interest rate rise.

The Bank of England’s Monetry Policy Committee (MPC) has decided to increase the base rate to its highest level for six years.

It now stands at 5.75 per cent and some industry experts have been warning of big financial repercussions for many people.

The decision by the MPC is the fifth rate rise in a year and many borrowers simply would not have been prepared.

Industry figures have been predicting rises for some time and this latest one came as no surprise, but those who borrowed money a few years ago had no idea that things would change so much.

The MPC took the decision in an attempt to bring inflation under control.

“The committee judged that, relative to the two per cent target, the balance of risks to the outlook for inflation in the medium term continued to lie to the upside,” the MPC said in a statement.

“Against that background, it further judged that an increase in Bank Rate of 0.25 percentage points to 5.75 per cent was necessary to meet the two per cent target for CPI [Consumer Price Index] inflation in the medium term.”

Tags: level, Monetry, Andrew Sentance, term interest, policy committee, highest level, money, rise