Today, Thursday 15 December 2022, The Bank of England increased interest rates by 0.5% to 3.5%.
Analysts are expecting Interest Rates to peak at 4.5% in 2023, before falling back down to 3%.
The Senior Finance Minister responded to the increase by saying, “We are united with the Bank of England in the determination to get that inflation rate down from 10.7% to the target of 2%.
“We recognise this is really hard for people across the economy. Dealing with inflation and using interest rates to do that is critically important.”
The Bank of England believes by increasing interest rates it will make borrowing more expensive and encourage people not to spend money, easing the pressure on prices in the process which will in turn begin to reduce inflation.
What this means
Individuals and businesses are being continually advised to save where possible, which will in turn help to reduce inflation, due to saving more and spending less.
Higher interest rates will be welcomed by those with savings however; those with variable mortgages, new home owners and those with bank or credit card debt will begin to endure the negative impact of the increases.
How can you cut costs in your business?
Read our earlier blog on Business Savings During the Cost of Living Crisis, http://www.seavorchartered.co.uk/cost-of-living-crisis/#more-6162
How we can help you
If you’d like to discuss your finances and our services we can provide to support you through the cost of living crisis, call us on 01228 904904 or pop us a message at mail@seavorchartered.co.uk.
