The Bank of England's recent rate hike directly hits borrowers with personal loans, credit cards, and variable-rate mortgages. Roughly 1.3 million tracker mortgage customers face instant payment surges, with some business owners seeing monthly costs jump by £45 amid rising utility bills. Expiring fixed-rate terms are forcing others into much steeper market rates, including an individual facing a £200 monthly rise after shifting to a 5.69% deal. Additionally, credit card providers can raise borrowing costs on just 30 days' notice, heightening pressure on families relying on credit for everyday necessities.
Key points
Borrowers face sustained pressure as analysts forecast additional interest rate increases…: Borrowers face sustained pressure as analysts forecast additional interest rate increases across the next 18 months.
Rising borrowing costs coincide with climbing food, fuel, and energy prices to strain hou…: Rising borrowing costs coincide with climbing food, fuel, and energy prices to strain household budgets nationwide.
Credit card providers can adjust interest rates with 30 days of notice, threatening consu…: Credit card providers can adjust interest rates with 30 days of notice, threatening consumers who depend on borrowing for basics.
Sources checked by our analysis pipeline: 1
- Published
On Thursday, the Bank of England increased interest rates for the first time in over three years as it tries to get a grip on rising inflation linked to the Iran war.
Experts say there could be more hikes over the next 18 months, as the conflict continues to push up food, fuel and energy prices across the UK and worldwide.
Higher interest rates affect borrowing costs, however, which means mortgages, credit cards and personal loans could get more expensive for millions, even as savings rates improve.
For some, it could mean extra financial pressure at a time when they are already struggling with the cost of living. The BBC spoke to three people about how they could be affected.
'Our tracker mortgage will go up'
Peter Gill, 48, is one of the around 1.3 million Britons on a variable rate mortgage.
These loans track the Bank of England base rate, with a margin on top determined by the lender, so any rise in interest rates can push up repayments.
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