The Bank of England increased the base rate for the 14th consecutive time today in their bid to combat inflation, the base rate is now sitting at 5.25% which is an increase of 0.25%. They are continuing to increase the base rate to try and bring inflation down to their target figure of 2%, the UK’s inflation is currently 7.9% but has fallen further than expected when the latest figures were released a couple of weeks ago.
At the time of writing, the financial markets have seemed to have reacted well to the Bank of England’s decision with SONIA Swap rates falling in all periods compared to where they were yesterday.
It’s not all bad news
In the past week, financial markets have started to settle compared to recent weeks. As a result, the rates that banks trade money has fallen. This has results in a number of lenders including the likes of HSBC, Santander and NatWest, all reducing some of their fixed rate mortgage products. Should this stability remain, we expect other lenders to follow and continue to reduce the interest rates offered for their fixed rate products.