The Bank of England today voted to keep the base rate unchanged at 0.75%.
Rate increases typically occur when the Bank is trying to control the pace of economic growth. Inflation, or the rising cost of living, rose to 2.5% in July, the first increase in the rate in 2018. However, if the Monetary Policy Committee raises rates by too much or too quickly, it could slow the economy too much, hence the decision to leave rates unchanged this month.
The last base rate increase was in August, when rates went up by quarter of a percentage point from 0.5% to 0.75%.
What the rate decision means for you
Since August’s rate rise, most lenders have put up their standard variable rates (SVRs) by the full quarter percentage point. Check our SVR Watch to see how lenders have reacted to the rise and whether yours has increased its rate.
As interest rates have remained the same this month, if you have a variable rate mortgage, your monthly payments shouldn’t change again - at least for the time being. Many commentators believe that further rate rises could be on the cards in future, so it’s worth reviewing your mortgage to see if you could reduce your monthly payments by switching to a different deal.
If you’re considering locking into a fixed rate deal it could pay to act sooner rather than later, before the best deals disappear. Since August’s rate rise, growing numbers of people are opting for longer five or 10-year fixed rate deals to provide them with peace of mind that they won’t see any change in monthly payments when rates next increase.
Read how to secure a fixed rate to protect against rising interest rates here.
Rates kept on hold in September