Interest rate increased for the first time in a decade

The Bank of England raised interest benchmark rates today from 0.25 % to 0.5%, for the first time in a decade. The monetary policy suggested according to Bank of England, Mark Carney, two further 0.25% increases are needed over the next two years to combat growing inflation. As a result 4 million borrowers will feel the pinch in their debt repayments while 45 million savers will benefit slightly increased returns on their nest eggs. Child poverty in UK is on the rise and will soar to a record 5.2 million in the next five years. By 2022, as much as 37 per cent will be living in poverty.

Voting seven to two in favour of the rate rise, the central bank’s Monetary policy committee intended to send a message that at least two further quarter of a percentage point rate rises would be needed over the next two years to control inflation.

Of the 8,1 million households with a mortgage, 3.7 million or 46 % are either on standard variable rate or tracker rate which usually move with the official bank rate.

The Sterling fell about 1% against US Dollar and Euro to $1.3130 and €1.280 respectively.