In an effort to counter the recent inflation rises, the Federal Reserve in the USA has just increased interest rates by 0.75%, aiming for a range of 2.25% to 2.5%.
As a knock on effect, the Bank of England Monetary Policy Committee has just voted to increase the UK interest rate to 1.75% from 1.25%. To rub salt into the wound, they project a long recession with interest rates topping out at above 10% down the line.
Whilst this all rewards Bank savers, the increases are designed to reduce the effects of inflation in various ways. Mortgage payments will increase, loan payments will increase, and money saving will increase.
If you are on a fixed rate mortgage, you will not be affected until your fixed rate period ends. To help you calculate your payments, try out our Loan Repayment Calculator to see how rate changes will affect you.
Effect of Higher Interest Rates
