First UK interest rate rise in 10 years!

For the first time in more than 10 years the Bank of England has raised interest rates.

The official rate has been increased from 0.25% to 0.5%. This is the first increase since July 2007.

The rates were initially cut last August after we left the European Union, but there has been increasing talk to reverse the move

This increase could have a negative impact on homeowners, who are facing higher mortgage interest payments. According to UK Finance, mortages could increase by between £11 and £12 a month.

The country’s 45 million savers could see the most out of the new rates,, with many seeing an increase in their returns.

The Monetary Policy Committee (MPC) who made the change, stated it was a response to the “limited” slack in the economy caused from falling unemployment.

Seven out of the nine members voted in favour of higher rates.

The financial markets are indicating two more interest rate increases over the next three years, taking the official rate to 1%.

The decision to leave the European Union and its consequent impact on the economy, had an effect on the decision. The MPC stated there were “Brexit-related constraints” which were holding back the potential growth rate of the UK economy.