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Base Rate Predicted to Rise to 0.5%

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The Bank of England is expected to increase base rate to 0.5% from 0.25% on Thursday as the cost of living continues to rise. The rate is used by the central bank to charge other banks and lenders when they borrow money – and influences what borrowers pay and savers earn. 

Read the full story here:
'Bank of England set to increase interest rates this week - what a rise could mean for you'

Click reply below to discuss. If you haven’t already, join the forum to reply.
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  • dunstonh
    dunstonh Posts: 119,599 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    At least you haven't gone all Daily Mail on us and said they are going to skyrocket by 50%.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • julicorn
    julicorn Posts: 2,583 Forumite
    Seventh Anniversary 1,000 Posts Name Dropper Photogenic
    dunstonh said:
    At least you haven't gone all Daily Mail on us and said they are going to skyrocket by 50%.
    0.25% -> 0.5% would mean a 100% increase - but then again, people get very confused by things going up 100%, or even more than that (god forbid, surely that's mathematically impossible! /s)
  • getmore4less
    getmore4less Posts: 46,882 Forumite
    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
    julicorn said:
    dunstonh said:
    At least you haven't gone all Daily Mail on us and said they are going to skyrocket by 50%.
    0.25% -> 0.5% would mean a 100% increase - but then again, people get very confused by things going up 100%, or even more than that (god forbid, surely that's mathematically impossible! /s)
    0.25% ->0.75%
  • Lenders have already factored this into their deals. I had a quote for a 5-year fix at 0.99% in September and now its 1.44% in January. 
  • Yeah we're in the process of remortgaging now and the deal we were looked at 2 weeks ago was 1.64% and on application it was 1.74%, so agreed that they have already factored this in. 
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Lenders have already factored this into their deals. I had a quote for a 5-year fix at 0.99% in September and now its 1.44% in January. 
    Will already be paying higher borrowing rates on the commercial markets. Estimations of how many times the FED will increase base rate , starting in March, in the USA differ between 4 and 7/8. For once even the markets have no broad concensus. Ripples will be felt across the pond. 
  • The 1.4% 12 month fix from Union Bank of India has a minimum investment of £5,000, not £1,000 as reported, and as also quoted in some parts of the bank's website.  I tried to apply for it today with a £2,000 invest: no good. Doesn't give me confidence in the bank, either!
  •  let's hope it will increase tenfold!   we need good saving rates
  • Silvertabby
    Silvertabby Posts: 10,094 Forumite
    10,000 Posts Eighth Anniversary Name Dropper Photogenic
    edited 2 February 2022 at 11:22AM
    Many people will have overstretched themselves, despite the stress test.

    Niece and her husband, as first time buyers, bought a new build 4 bed/2 bath/study 5 years ago with the maximum help-to-buy loan and the rest of the deposit from the bank of mum and dad.

    5 years, 2 children and 2 new car loan repayments later, the help to buy loan payments have just kicked in and even if they remortgage to cover it, seems they hadn't budgetted for a higher mortgage AND a rate rise.

    Sis-in-law has been dropping big hints about us giving our niece her inheritance now, when she really needs it (ie, we take out some form of equity release, as they did to raise the deposit) but as we are only in our 60s that isn't going to happen.

    Sadly, my niece and her family won't be the only ones in this situation.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Many people will have overstretched themselves, despite the stress test.

    Niece and her husband, as first time buyers, bought a new build 4 bed/2 bath/study 5 years ago with the maximum help-to-buy loan and the rest of the deposit from the bank of mum and dad.

    5 years, 2 children and 2 new car loan repayments later, the help to buy loan payments have just kicked in and even if they remortgage to cover it, seems they hadn't budgetted for a higher mortgage AND a rate rise.

    Sis-in-law has been dropping big hints about us giving our niece her inheritance now, when she really needs it (ie, we take out some form of equity release, as they did to raise the deposit) but as we are only in our 60s that isn't going to happen.

    Sadly, my niece and her family won't be the only ones in this situation.
    We all have choices as to how we manage our money. The property will have increased considerably in value and they will have paid off some of the mortgage. As a consequence are far from being in financial difficulty. 
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