Reaction to bank rate increase

CEO of RIFT Tax Refunds, Bradley Post, commented:

“A further squeezing of borrowing costs will not help the cost of living crisis one jot. Together with the highest tax burden in decades the hard-working public could be forgiven for believing that the powers-that-be do not exactly have their back, so to speak.

It’s a debatable point, however in order to avoid a full-blown recession the government needs to now look at mitigating taxation for individuals and for businesses, starting with a reduction in corporation tax to help small businesses invest and expand so that their workforce can thrive too. Growing our economy is crucial at this time and taxing it until the pips squeak is not conducive with that.”

Managing Director of House Buyer Bureau, Chris Hodgkinson, commented:

“This latest rise in bank rates may well be the last as inflation is said by many economists to have peaked.

This will be welcome respite for homeowners with a variable rate mortgage in particular and notwithstanding that some 70% of mortgage holders are on fixed rates in any case and remain somewhat unaffected by the Bank of England’s enthusiasm to make borrowing more expensive.

Whilst we have seen rate turbulence affect housing market sentiment resulting in softer prices in recent months, we can now expect a more stable, normal market in the latter part of this year.

We’re not quite out of the economic woods yet, however there is certainly room for more optimism compared to the latter part of 2022.”

CEO of Octane Capital, Jonathan Samuels, commented:

“Another month, another escalation of the Bank of England’s current stance on raising borrowing costs. This is the tenth consecutive rise from our friends in Threadneedle Street and miles away from the now distant days of a sub 1% environment.

That said, one hopes that all of the blood has now been squeezed from the stone and that rates have peaked. Surely it’s time that we focus on investing in business growth now that inflation seems to be tamed at last?”

CEO of easyMoney, Jason Ferrando, commented:

“Despite this latest rate rise hurting variable rate borrowers, there is a flip-side for investors and savers that is the yield on their savings may see a better return thanks to today’s Bank of England decision.

This is the ‘see-saw’ of such actions and one hopes that whilst the economy may smart at the cost of money spiking once again that this is somewhat mitigated by borrower returns.

Many high street banks and investment platforms have not increased their investor return yields recently as we have however, and our sector must make more effort to do so.”

Co-founder and CEO of Wayhome, Nigel Purves, commented:

“Yet another hike in interest rates will do little to help the nation’s first-time buyers who have not only suffered due to an extremely inflated rate of house price growth during the pandemic, but now face higher monthly mortgage payments when they do finally make it onto the ladder.

For many, this will only push their aspirations of homeownership further out of reach, as they find they can no longer make the jump as the mortgage required is no longer affordable for them.”

Director of Benham and Reeves, Marc von Grundherr, commented:

“Achieving the heights of a 4% borrowing rate would have been seen as fantastical a year ago yet we have now reached it, the highest since 2008. We all know what 2008 is synonymous with and at this rate (pun entirely intended) we’ll be back to the depths of the financial crisis in short order.

Just as overseas property buyers are returning to the capital after a near three year hiatus, those wanting to do so via a UK mortgage are facing an increasing financial obstacle and with even further pressure on house prices as a consequence.”

Managing Director of Barrows and Forrester, James Forrester, commented:

“Another bank rate hike that will see potential homebuyers crying in their avocado sandwiches.

It’s hard to understand how the government’s quest for growth can be squared with these ridiculous and all too regular jumps in bank rate. The two are totally at odds with each other and today’s announcement is further confirmation that Andrew Bailey’s hand doesn’t know what Jeremy Hunt’s is doing.

The economy needs a boost as does the housing market and this obvious confusion amongst our so-called leaders is doing nothing to drag us back to being an economic leader in the world. We’re in danger of becoming a global white elephant economically and it’s frankly embarrassing.”