Bank rates hit highest level since 2008

The 0.25% increase, voted for by seven out the nine members of the Monetary Policy Committee (MPC), means bank rates now sit at 4.5% - their highest level since April 2008. The MPC’s projections also appear to suggest bank rates will peak at around 4.75% by the end of the fourth quarter of 2023, before dropping to just over 3.5% by the end of the forecast period.  

Reflecting on the increase, Equifax UK’s chief data and analytics officer Paul Heywood said the Bank of England’s run of “remarkably consistent base rate rises” may have played a role in business and consumer confidence increase month-on-month, consumers may find the realities of high borrowing costs and squeezed wages hit home. 

He added: “With rates rising we expect cases of ‘mortgage shock’ to rise in the next six months – as many as 1.4 million consumers will face a 50% increase to their mortgage repayments. This shock may force consumers to high-cost short-term credit to meet existing debt obligations, a spiral that Equifax, and our lending partners, work hard to identify and prevent.  

“We’ll continue to ensure that consumers are effectively supported throughout their borrowing journey and can access the credit they need to live their financial best.”