Shock rate rise to 5.25% |
In an unexpected move, the Bank of England today increased the base rate to 5.25%. After the two recent quarter point increases, commentators were not generally expecting any movement so early in 2007.
A quarter point rise will cause an increase of £16 to a 25 yr £100,000 repayment mortage’s monthly payments, while an interest only mortgage would increase by nearly £21.
The rise is believed to be an early reaction to a further increase in inflation – which rose to 2.7% recently.
