and does this mean, rates will they come down?
Alright, folks, let's talk money, interest rates, and that occasional feeling we get when the Bank of England and its pals have a chat.
The Bank of England, in its oh-so-fashionable way, sat around the big table once again, discussing the 'I' word – inflation!
Since December 2021, they've been hiking those interest rates because, you know, we've had some wild times with food and energy prices doing the cha-cha on the charts. However, plot twist! On Thursday, they decided to take a break from their latest addiction of bumping up rates. Maybe they realized there's more to life? Who knows?
So, while you're all here wondering what this means for your wallet, I've got your back! Let's unravel this together.
Interest rates today?
The bank's crew decided to put their feet up and chill, leaving the base interest rate hanging at 5.25% this September. A breather, right? Especially after a marathon of 14 straight rises from a wee 0.1%. Feels like a series season finale, since this is the highest we've seen since 2008. Cue the dramatic music!
Impact on our dear borrowers
The past interest hikes were like those uninvited guests at a party for borrowers. Variable rate mortgage? You felt it. But, thanks to this recent decision, you can now take a sip of your tea without burning your tongue. If you're on the fixed-rate side or thinking of diving in, it's probably going to be steady sailing for you.
By the way, if you thought renting shields you from the interest rate drama, think again! But hey, the recent pause might just give everyone a bit more room to breathe.
And to the savers out there – I know, it's been a rollercoaster. Higher interest means more moolah in your bank account, but for now, we're in a holding pattern.
Predicting the unpredictable If anyone can perfectly predict future rates, I've got a magic crystal ball for sale. Just kidding! The Bank’s whispers hint at possible rises, reaching around 5.8% later this year. But then, banks do like to keep us guessing.
The Government’s aims with inflation They announced their ambitious mission to slice inflation from a meaty 10.7% to a leaner 5.3% by year's end. Last check? Inflation was at 6.7%. The Bank's forecast? It's on track to dip further to 4.9%. But let's sprinkle a pinch of salt on these projections, especially with international energy prices playing their own game.
And the economy? The Bank's got some mixed feelings. Recession? Probably not this year, but they did trim their expectations for the UK's economy a tad, projecting a tiny 0.1% GDP rise in the upcoming quarter. Fingers crossed it’s just their version of under-promise and over-deliver.
So, there you have it, folks! Your mini-guide to the recent money talk. Remember, keep an eye on the Bank of England for more updates and possibly some new dance moves for those rates.
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