Mortgage for Business have made the following comments on the recent rise in interest rates:

Most people expected the Bank of England to leave rates unchanged in December, but they surprised us all with the 0.15% increase last week. In reality, this relatively minor rate move is no more than an adjustment to correct the inflation figures, but it is the first step in ensuring rising inflation does not become embedded.

It appears that the impact of Omicron, and its effects on the economy, are likely to lead to still higher inflation rates over the coming months and as such, the decision to act sooner made it clear that the Bank sees its main task to be hitting the inflation target.

With the Bank of England currently anticipating that interest rates will need to rise further next year, the pressure is once again on Mr. Sunak to support the economy through what looks likely to be a testing festive period. For our clients my view remains unchanged, we can’t see anything other than the cost of borrowing increasing next year and with most analysts predicting BBR to be at 1 – 1.25% by the end of 2022. These increases will, as SWAP rates already indicate, be passed on to borrowers at the same pace, so I would advise acting as soon as possible and ensuring you are fixed into the lowest mortgage rates now.