It’s good news for those with mortgages and loans, with the Bank of England announcing an interest rate cut to 4.50%, down from 4.75%. Not so great news for savers, with most getting a bit less interest each month.
Although inflation is still above the Bank of England target of 2%, with recent figures putting inflation at 2.5%, the UK economy is not in the best shape, and an interest rate cut is intended to encourage people to spend a bit more to boost the economy, by giving people a bit more in their back pocket with lower borrowing costs (e.g. lower mortgage payments).
Note: inflation is the cost of things (like food) going up over time.
The Bank of England rate is the interest rate banks get when they deposit their money with the Bank of England, and so it has a knock on effect for things that banks, and other financial companies, give you, such as savings accounts and mortgages.
If you’re due to change your mortgage soon, for instance coming to the end of your fixed rate deal, make sure you check for the best new rates with our mortgage comparison tool. And, it’s a good idea to get a mortgage broker to search the market for you too.
And if you’ve got savings, make sure you’re getting the best rate possible. Here’s the best savings accounts to check.
