Bank of England Announces Biggest Base Rates Hike Since The 1980s
The Bank of England has today (3rd November) increased its base rate by 0.75%, taking it to 3% in a move that marks the biggest rise for 33 years.
The latest rates hike – the bank’s eighth in a row – will see the rates for some mortgages rise instantly, while new products could follow suit over time.
Variable rate agreements, such as tracker mortgages, will rise straight away, and lenders could now increase the cost of other product types across the board. Those locked into the introductory rates period of a fixed-rate deal won’t see any increase, though.
There has been a dramatic shift of market conditions over the last year. Less than 12 months ago, the base rate was 0.1% as the dust from the COVID pandemic settled.
The latest rates rise is part of the central bank’s ongoing strategy to curb rocketing inflation, which has been on the up throughout the cost-of-living crisis.
Commenting on the Bank of England’s decision, Online Mortgage Advisor’s managing director, Pete Mugleston, said: “Although the most recent base rates increase is the biggest since 1989, new borrowers, those on variable rate mortgages and remortgage customers should still seek professional advice from a broker to find out what their options are, rather than delay their plans.
“We’re confident that the market will eventually come out of this and stabilise, but in the meantime, the right broker could still help you save money. Their knowledge, experience and contacts will increase your chances of landing the best rate available in these uncertain times – the value of the right mortgage advice has never been higher.”
The Bank of England’s Monetary Policy Committee will next meet to discuss whether the base rate should rise, fall or hold firm on 15th December.