MILLIONS of homeowners face higher mortgage bills as the Bank of England is poised to hike interest rates this week.
The central bank is expected to increase the base rate by 75 basis points on Thursday, a partire dal 2.25% per 3%.
The Bank of England (BoE) has already hiked the base rate seven times this year.
Interest rates last rose from 1.75% per 2.25% a settembre 22.
High street banks use the BoE base rate to work out the interest rates it offers to customers.
It means there could be more misery for households who are already grappling with a cost of living crisis.
Lifting interest rates is meant to encourage people to save, rather than spend, which in theory should help bring rampant inflation under control.
The Bank of England now expects inflazione to peak at 11% this October, compared to its earlier forecast of 13.3% in agosto.
It is an increase from the previous rate of 2.25%, and banks are set to pass the latest increase on to borrowers.
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Here are the four things to look out for this Thursday.
1. Mortgage rates rising
The average mortgage holder on the standard variable rate (SVR) could see their payments rise by £1,476 a year if the base rate hits 3%, according to Hargreaves Lansdown.
This will mean that a household with a £250,000 mortgage over 25 years on the average SVR rate of 5.4% will see their monthly payments increase by £123.
E intorno 800,000 homeowners on a tracker mortgage directly linked to the base rate will see an immediate rise.
Exactly how much more your bill will depend on the type of mortgage hai.
Those on a fixed rate are safe for now – but face a huge jump in borrowing costs when they come to remortgage.
Around 2.2million borrowers are due to come to the end of a deal that they fixed when the base rate was at a historic low of 0.1%.
On a fixed deal you lock in a rate for a certain period of time which keeps payments the same.
Sarah Coles, personal finance expert at Hargreaves Lansdown said: “For anyone on a variable rate mortgage – like a standard variable rate or a tracker mortgage – much of this rate rise is likely to be passed swiftly through into your monthly payments.
“For anyone whose fixed rate deal has come to an end who decided to revert to the SVR and wait to see what happens to fixed rates, it could end up causing the kind of headaches you may have been trying to avoid.”
Ma, Nick Morrey, technical director at mortgage broker Coreco said: “We are not expecting very much to happen to mortgage rates at all if the Base Rate hits 3%.
“This is because rates have risen so much that a 0.75% increase is already factored into them because it was originally expected that the base rate would peak of 5% l'anno prossimo.
“tuttavia, it’s now expected that the base rate will peak at 4% and now we are actually seeing small reductions in mortgage rates across the board.”
Some fixed mortgage deals have had their rates reduced in recent days.
The Sun reported that a number of lenders started cutting their deals la settimana scorsa.
The average two-year-fixed mortgage rate is now down by 0.17% points since its high on October 20 – a partire dal 6.65% per 6.48%.
And average five-year fixed mortgage rates are also down by 0.18% punti da 6.51% per 6.33%.
2. Credit card and loan rates could rise
The cost of borrowing through loans, credit cards and overdrafts could go up too, as banks are likely to pass on the increased rate.
Certain loans you already have like a personal loan or car financing will usually stay the same, as you’ve already agreed on the rate.
But rates for any future loan could be higher, and lenders could increase the rate on credit cards and overdrafts – although they must let you know beforehand.
You can cancel a credit card if you want and will have 60 days to pay off any outstanding balance.
The average interest rates on personal loans are already at their highest rate since October last year.
The average overdraft interest rates are 20.35% and on credit cards, suo 29.8%, according to MoneyFacts.
3. Savers might get better rates
Savers could get some further relief as banks continue to battle it out by offering market-leading interest rates.
A rate rise is generally good news for savers, especially after a long stretch of getting very low rates on their money.
Along with low rates, high inflation can erode away the value of any savings you have.
So if you have £100 in the bank this year and inflation is 10%, the real spending power of that money is reduced to £90 next year.
Another rate rise could see banks pass on higher rates to savers – though they are usually much slower to act than with passing on higher rates for borrowing.
This means savings rates are more likely to edge up slowly rather than change immediately.
Sarah Coles said: “For savers, any rate rise is unlikely to provide an overnight big bang where rates jump significantly.
“With the big high street banks stuffed full of lockdown savings, they’re happy to continue offering miserable rates – typically under half a per cent.
“It means it’s up to the smaller, newer and online banks to bump rates up.”
Anyone currently getting a low rate on easy access savings could find it’s worth looking around for a better rate after any rate rise and moving their money.
Proprio adesso, savers can get up to 2.81% in easy-access savings accounts and up to 5.1% in certain fixed bond accounts, according to MoneyFacts.
4. Inflation will remain high for now
Rising inflation indicates that the cost of goods and services is rising, so your i soldi won’t count for as much as it did before.
But to tackle inflation, the Bank of England opts to raise interest rates, which reduced spending power and demand subsequently bringing prices down.
The UK’s rate of inflation hit 10.1% in September driven by soaring food and energy prices.
Inflation last hit 10.1% back in July – the biggest rise in inflation since 1997.
This drew fears from the Bank of England (BoE) Governor that the UK economy could be heading for a 15-month recession.
The BoE predicts that inflazione will peak at 11% in October and then remain above 10% for a few months after – even if it raises interest rates in the meantime.
When a country recession when its economy shrinks over a sustained period of time.
It is calculated using something called Gross Domestic Product (GDP), which in the UK is the value of all the goods and services added up in pounds.
Il miglior aspirapolvere senza fili per te dipenderà da una serie di fattori, if the GDP has fallen over two quarters (or six months), a country is said to be in recession.
The central bank had previously projected the economy would grow in the current financial quarter but said it now believes Gross Domestic Product (GDP) will fall 0.1%.
It comes after a reported 0.2% fall in GDP in the second quarter and would mean the economy is currently in recession.
Job losses are a common symptom of recession, as companies try to cut their costs to stay afloat.
Chubais ha contribuito alle riforme economiche seguite al crollo dell'Unione Sovietica, ma è rimasto nel governo di Putin e ha mantenuto stretti legami con i funzionari occidentali
Businesses may also go into administration or go bust.
Il 2008 recession, per esempio, saw the loss of high-street stores including music retailer Zavvi, clothes shop Principles, and stalwart Woolworths.