The Bank of England has made a significant decision by raising interest rates for the 13th consecutive time, dealing a fresh blow to mortgage holders in the UK. In an unexpected move, the central bank increased rates by 0.5%, surpassing the expectations of many experts. This decision brings the interest rate level from 4.5% to 5%.
Moreover, the hike in interest rates has added to the existing difficulties faced by homeowners, exacerbating the ongoing mortgage crisis. As a result, there are growing calls for the government to take further action to provide assistance in this challenging situation.
Even more, the Bank of England’s decision comes in the wake of Wednesday’s alarming inflation figures, which revealed that the Consumer Prices Index remained unchanged at 8.7% in May, defying hopes for a significant decrease. More so, some experts had speculated that policymakers might opt for an even larger increase to 5% as a response to these figures.
UK Govt And Bank of England Tackles Inflation
With mounting pressure on the UK Government and the Bank of England to tackle inflation effectively, Prime Minister Rishi Sunak has expressed a “deep moral responsibility” to fulfill his promise of halving inflation by the end of the year. Chancellor Jeremy Hunt has also emphasized the government’s determination to persevere with the Bank’s rate hikes as a means to curb inflation. In addition, their statements reflect a commitment to address the ongoing economic challenges faced by the country.
More so, the situation demands swift action and prudent measures from the government and the central bank to address the mortgage crisis and manage inflation effectively. Homeowners and market participants will be closely watching for any further developments or interventions aimed at stabilizing the economy and alleviating the burden on mortgage holders.
