INTEREST rates have been pushed up for the eleventh time in a row to 4.25%, the highest rate for 14 years.
The SNP said the rise meant “millions of homeowners and renters are being hammered by Westminster failure”.
The central Bank of England is putting rates up in an attempt to put a lid on soaring prices after UK inflation jumped higher last month, to 10.4% from 10.1% in January, driven by surging food and drink prices.
Policymakers on the Bank’s Monetary Policy Committee (MPC) voted seven to two to increase rates from 4% to 4.25%, but said they expect the economy to grow slightly in the second quarter of the year, marking a reversal of the 0.4% decline in gross domestic product (GDP) the Bank had anticipated last month.
“CPI increased unexpectedly in the latest release, but it remains likely to fall sharply over the rest of the year,” the Bank said.
Mortgage borrowers on deals which track the Bank of England base rate will now see nearly £24 per month added to their costs on average, following Thursday’s rate hike.
According to figures from trade association UK Finance, the latest Bank of England base rate increase will typically add £23.71 per month – or more than £284 per year – to the cost of a tracker mortgage.
Borrowers on a standard variable rate (SVR) meanwhile will see their costs increase by £15.14 per month – or more than £181 per year – on average if the rate hike is passed on by their lender.
UK Finance’s figures are based on average outstanding balances and payments.
It calculated that, since December 2021, the average tracker mortgage payment will have increased by £393.65 per month – or around £4724 per year.
The average SVR will have increased by £251.34 per month, or £3016 per year, assuming base rate hikes are fully passed on.
Stewart Hosie (below), the SNPs’ economy spokesperson, said: "The Tories and pro-Brexit Labour Party have trashed the UK economy and they are forcing families to pay the price – as interest rates, inflation and household bills soar.
"Millions of homeowners and renters are being hammered by Westminster failure. With monthly costs going through the roof, it's essential that the UK government finally delivers urgent help to support people's incomes and prevent families losing their homes.
"It was deeply disappointing that neither the Tories, or the Tory-lite Labour Party, backed SNP calls for comprehensive support at the UK Budget – including our calls to cut energy bills, raise public sector pay, and boost economic growth by rejoining the EU.”
The Bank’s Monetary Policy Committee (MPC) recognised the recent period of volatility in the global banking sector, after the collapse of the US’s Silicon Valley Bank and the rescue takeover of Credit Suisse, but stood firm in its mission to bring inflation back down to its 2% target.
Andrew Montlake, managing director of Coreco Mortgage Brokers said: “They say a week is a long time in politics, but a day is an aeon in the financial markets.
“In the past few days, we have seen the contradictory effects of a banking drama pushing rates down on the one hand, and the surprise rise in inflation pulling in the opposite direction.”
