Bank of England Announces Biggest Base Rates Hike Since The 1980s

The Bank of England increased its base rate by 0.75% today (November 3rd), taking it to 3%, the biggest rise in 33 years.

The latest rate hike—the bank’s eighth in a row—will raise the rates for some mortgages instantly, while new products could follow suit over time.

Variable rate agreements, such as tracker mortgages, will rise straightaway, and lenders could 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.

Market conditions have dramatically changed over the last year. Less than 12 months ago, the base rate was 0.1% as the dust from the COVID-19 pandemic settled.

The latest rate rise is part of the central bank’s ongoing strategy to curb rocketing inflation, which has continued 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 on 15 December to discuss whether the base rate should rise, fall, or hold firm.