Bank of England hikes interest rate by 0.50% to 2.25%

The Bank of England (BoE) has increased the base rate by 0.50% to 2.25%, the highest level seen in 14 years.

The Bank’s Monetary Policy Committee (MPC) voted 5-4 in favour of the 0.50% rise, while three members were in favour of a larger 0.75% increase.

This is the seventh consecutive rise by the central bank and the largest individual increase since 1989.

The rate now stands at the highest level seen since the economic crash in 2008.

Earlier this month inflation took an unexpected dip below double digits but still stands at a whopping 9.9%, well above the BoE’s target of 2%.

The unprecedented levels of inflation currently being seen are a direct result of the ongoing war in Ukraine, which has seen the price of oil and gas soar – those prices were already aggravated by the ongoing cost of living crisis, which has left households struggling to pay energy bills.

Following the increase, it can now be expected that lenders will reprice mortgages once more.

Today’s decision to raise rates follows similar increases in other nations. Yesterday, the US Federal Reserve raised its key rate by another 0.75%, and on Tuesday European Central Bank president Christine Lagarde urged central banks to raise rates fast.


Simon McCulloch, Chief Commercial & Growth Officer at Smoove:

“The Bank of England’s latest hike will present a challenge for both prospective buyers and homeowners. First-time buyers will have to hunt for an affordable fixed-rate mortgage that can shield them from spiralling base rates.

“Those on a standard variable rate may wish to consider other options, perhaps committing to a more affordable fixed-term mortgage before rates rise even further. We expect longer term mortgages in excess of 25 years, to become far more common as the base rate ratchets up.

“While one might expect the property market to dip, both in terms of pricing and transaction volumes, on the back of this rate hiking cycle, the mooted stamp duty reforms may maintain activity through the economic downturn.”

Steve Seal, CEO, Bluestone Mortgages:

“Today’s decision will be a tough pill to swallow for consumers and borrowers across the country, as rates rise for the seventh consecutive month amid the ongoing cost of living crisis.

“As rates are expected to rise even further to battle soaring inflation, people will no doubt continue to feel the squeeze on their personal finances and face affordability challenges in the coming months. 

“Now more than ever, brokers have a critical role to play. Not only in supporting existing and would-be borrowers, many of whom will have never experienced so many consecutive rates, but demonstrating the range of options available to help them reach their homeownership dreams despite these market conditions.

“As for the customers who are concerned about how this rate rise will affect their ability to meet their mortgage repayments, we highly encourage them to speak to their lenders as early as possible. The earlier you engage, the more personalised support you will receive.”

Iain Crawford, CEO of Alliance Fund:

“Another base rate increase was anticipated, albeit delayed by a week, and while a half a per cent jump may certainly seem cause for concern, the cost of borrowing remains very palatable for those looking to invest their hard earned money into bricks and mortar. 

“Despite the wider pressures of economic uncertainty and the increasing cost of living, we’ve seen an unwavering level of buyer demand continue to cultivate positive house price growth across the UK market and we can expect this buoyancy to remain for the foreseeable future. 

“The real issue facing the nation’s homebuyers at present isn’t the increased cost of securing a mortgage, but the lack of suitable stock available to them when looking to buy. Unfortunately, the government looks set to keep their head in the sand in this respect, ignoring the burning issue of housing supply and instead choosing to fuel demand with a cut to stamp duty.”

Jonathan Samuels, CEO of Octane Capital:

“While generations of homeowners have only ever experienced a sub one per cent base rate, they are quickly becoming accustomed to the increasing cost of borrowing with a seventh consecutive increase by the Bank of England today and the largest jump in some years. 

“The average homebuyer is already paying between two to three hundred pounds a month more on the cost of their mortgage versus the end of last year and we’ve already seen many lenders preemptively react to today’s delayed increase so this cost is unfortunately set to climb even further.”

Almas Uddin, founding director of Revolution Brokers:

“Not only is the cost of repaying a mortgage our most substantial household outgoing, this cost has also seen the second largest increase in the last year, with just energy bills increasing at a higher rate. 

“This is, of course, a worry for many homeowners who are already stretched thin financially and have one eye on next month’s energy cap increase. 

“The bad news is that yet another base rate increase will do little to ease the current situation and so those currently looking to buy, or those on a variable rate mortgage, can expect the cost of borrowing to continue to climb.”

James Forrester, managing director of Barrows and Forrester:

“Increasing interest rates are certainly a worry for homebuyers who are now seeing an end to the prolonged period borrowing affordability enjoyed for many years. 

“However, interest rates still remain historically low and the property market continues to go from strength to strength. So while the current cost of living crisis may cause some to think twice before climbing the ladder, it remains one of the smartest and safest investments you can make, despite the increasing cost of repaying your mortgage.”

Marc von Grundherr, director of Benham and Reeves:

“Not only has the cost of running our homes increased dramatically in recent months, but the temptation to over borrow while rates were low is now coming back to haunt many homeowners. 

“Those who purchased a property during the pandemic market boom and have come to the end of their fixed mortgage term, as well as those on a variable rate mortgage, are now being hit with both barrels as the monthly cost of their mortgage climbed considerably. 

“However, while this is sure to add a degree of caution going forward, it’s unlikely to dampen the appetite of the nation’s aspirational homebuyers, which will ensure that the property market remains resolute despite the wider economic landscape.”

Chris Hodgkinson, managing director of HBB Solutions:

“We’ve seen interest rates increase consistently since the first rise in December of last year and while this is yet to rock the boat where house prices are concerned, a seventh consecutive increase will have homebuyers feeling a little queasy, to say the least. 

“An undertone of economic uncertainty has already dampened buyer appetites to some extent and with the cost of borrowing now substantially higher than it was just a few months back, we can expect the level of buyers entering the market to decline. 

“When this happens, home sellers will find that they may well have to lower their asking price expectations and this period of adjustment is likely to be an uncomfortable one, with sales falling through due to the market turbulence caused.”

Mark Harris, chief executive of mortgage broker SPF Private Clients: 

“While a 50 basis points rate rise does not feel as aggressive as the 75 basis points that was mooted in some quarters, it still means a considerable increase in monthly payments for those on variable-rate mortgages and comes on the back of six interest rate rises since December.

“It means a borrower with a £300,000 variable-rate mortgage will have to find an extra £1,500 a year. With the energy price cap due to rise again at the beginning of October, some households will really struggle.

“However, we don’t believe rates will or should go much beyond 3%, despite fears that they could go higher. If the Bank of England were to hike interest rates to say 4% or 5%, it risks causing greater problems than those it is attempting to control. 

“Mortgage deals can be reserved up to six months before you need them so it may be worth securing a new product now which can be moved onto once your existing deal ends. We are being approached by many borrowers on fixed rates considering paying early redemption penalties in order to secure another fix sooner rather than later. This may or may not be in your best interests, depending on the rate and length of time left to run, so it is important to seek advice from a broker.”

Jeremy Leaf, north London estate agent and a former RICS residential chairman: 

“From our experience on the ground, the impact of the interest rate rise will be felt most with regard to confidence to move and take on debt.

“The increase will impact first-time buyers and new borrowers particularly, bearing in mind approximately 80% of borrowers are on fixed rates. However, with UK Finance forecasting that 1.8 million deals are due to end at some point next year, there will be plenty of borrowers looking for new mortgage deals at a time when rates are likely to be considerably higher.

“Although rates are still low compared with their historical average, the impact is exacerbated by continuing worries about inflation and the economy generally.

“The longer the climate of higher interest rates persists, the more likely it is that people will consider selling, leading to a softening in prices. However, it is worth remembering that around 50% of homeowners are not dependent on mortgage finance at all so will be unaffected.”

Adam Ruddle, chief investment officer at LV=:

“The Bank of England’s decision to raise interest rates by 0.5% is in line with our expectations. The Bank has to strike a balance between soaring inflation and subdued economic growth, a challenge it has not faced for many years.

“While an increased rate helps tackle inflation it hinders economic growth. The Bank’s views on inflation have fallen as a result of the Energy Price Capping initiatives but risks have increased that inflation may remain entrenched for longer than previous expected.

“This likely means that interest rates will continue to rise and remain at higher levels for longer. We anticipate that interest rates will continue to rise and reach 3.75% by the end of 2023.”

Conor Murphy: “Many more homeowners will likely be looking to lock in rates before any further potential rises.” 

Conor Murphy, CEO at Smartr365: 

“The domino-effect of the Bank of England’s base rate decisions has been a hot topic of conversation throughout 2022.

“Today sees what has become somewhat of an established trajectory continue, with a 0.5% rise announced this morning. 

“The property market continues to withstand these ongoing rate rises, proving its resilience despite wider economic challenges. However, with ongoing economic uncertainty, many more homeowners will likely be looking to lock in rates before any further potential rises.  

“In this climate, enabling a stress-free and efficient mortgage journey is an increasing priority. Platforms that ensure a swift and seamless end-to-end experience are crucial to helping brokers to support those who need it most this autumn.” 

Kevin Roberts, managing director of Legal & General Mortgage Services:

“Today’s decision to raise the base rate comes as no surprise to those watching the headlines. Inflation and rising energy costs have dominated the news and it’s clear that the Bank of England is committed to fighting this.

“Of course, these decisions don’t exist in a vacuum and borrowers may be worried about what the knock-on effects of today’s news will be on their future mortgage payments and ability to borrow. For many of these borrowers, or would-be borrowers, this latest worry may just add to serious existing concerns about winter energy costs and a general rise in the cost of living. 

“Rates are only one part of the puzzle though, and it’s important to stress that activity in the housing market still remains very healthy. Additionally, many existing borrowers, for instance those on fixed-rate mortgages, won’t actually see any impact on rates until their current deal ends.

“There might also be help on the horizon for new borrowers, as the government is expected to announce a cut to Stamp Duty later this week. There are then some reasons for positivity, in spite of the headlines.

“As an industry we need to acknowledge though that some borrowers may have difficulty navigating this quickly-moving environment and may be unaware of the support available to them. This is an opportunity for advisers to show their true worth.

“Good quality financial advice will be crucial in helping borrowers see past the initial headlines and understand what all this news means for their particular situation. Speaking with a mortgage adviser can help borrowers to better understand the options that are available and find a solution that’s right for them.”

Avinav Nigam, cofounder of real estate investment platform, IMMO:

“Hiking interest rates is one way to curb spiralling inflation by reducing consumer demand. However, it has a severe impact on mortgages, as the rate of borrowing climbs even higher. Coupled with the affordability crisis, this will make owning a property even more out of reach.  

“It most significantly impacts the circa 900,000 borrowers on variable-rate mortgages, as well as the 1.1 million on standard variable rates.

“We could see an increase in the supply of properties coming to market as mortgages become unaffordable. There’s an increased risk of mortgage defaults, affecting consumers’ lives directly. 

“This all means that we are set to see a shift from a sellers’ market to a buyers’ market over coming months. Cash buyers and investors with more disposable money will find it easier to buy properties.  

“Rising rates give consumers less flexibility when it comes to housing and mean they have to move towards renting as buying becomes unaffordable. The need for professional landlords to provide safe, affordable and quality homes for renting is stronger than ever.”

Richard Pike, chief sales and marketing officer at Phoebus Software:

“This was probably the worst kept secret this week, that and the expected cut to Stamp Duty tomorrow. 

“While we were expecting it this rise, although not the 0.75% that many had touted, is one that will add further pressure to finances that are already under so much pressure with the rising cost of living. 

“Savers will of course see the difference in a positive way, but it is mortgage borrowers that will taking the brunt of this increase.

“In his fiscal event tomorrow the Chancellor will have a chance to ease the burden, but for anyone on an SVR the cost of their mortgage is the one thing that he will be unable to affect now that the Bank of England has put rates up again.

“The focus for mortgage lenders must be on affordability and using all the tools at their disposal to ensure they are keeping track and identifying struggling borrowers.  Acting now could save a lot of unnecessary anguish down the line.”

Paul McGerrigan, CEO at FinTech brokerage

“Yet another interest rate hike in these difficult times is going to provide more challenges to homeowners with tracker mortgages, and many of those coming off fixed rates are going to face considerable difficulty as they see their monthly payments jump significantly.

“It is highly likely the new Prime Minister’s package of aid to control energy prices over the winter will have considerable impact in curbing inflation growth, but it’s going to take time to take full effect, and it feels like the Bank of England is hitting households early and hard.

“There needs to be more focus on financial planning to help households prepare for the prolonged impact of high inflation, and a benefits cushion for those on lower incomes.

“Long-term solutions to the energy crisis need to be found and put in place with the greatest expediency.”

Brian Murphy, head of lending at Mortgage Advice Bureau:

“The Bank of England’s interest rate decision today will not surprise anyone, but that doesn’t mean it is a welcome announcement.

“Whilst we must commend the efforts of the policymakers to intervene in the current inflation nightmare, the negative impact of the rising rates on mortgages and sky-high house prices has been felt by many, whether they are a homeowner, or prospective buyer.

“In the context of further rate rises, being savvy can’t outmanoeuvre the increasingly unfriendly property market environment. 

“Nevertheless, if you decided against locking in a fixed rate mortgage after last month’s rise, we would certainly recommend looking into it now if you can, as it can offer a degree of protection if this upwards trend continues as seems likely.

“Do bear in mind the penalty you may face for switching early, and that everyone’s circumstances are different, so the best advice for everyone is also different. As such, the best course of action is to speak to a whole of market mortgage broker or your mortgage lender about the financial implications of the latest rise for your own personal situation.”

John Phillips, national operations director at Just Mortgages:  

“There was a certain inevitability to this latest 0.5% bank base rate rise although it’s worth noting that three of the MPC members voted for an even greater rise of 0.75% which would have taken us to 2.5%. That will however be no consolation to those watching their mortgage payments rise or seeing the sub four percent mortgage product they wanted being withdrawn from the market.  

“Our brokers across the country tell us that remortgage business is continuing to gain momentum and with interest rates rising to 2008 levels and with no sign of stopping it’s easy to see why. Although house price growth is robust with year-on-year growth in excess of 15% borrowers are looking to secure an affordable rate rather than release equity in their homes. 

“Rising house prices do offer something of an equity-based safety net to homeowners but this is often just a value ‘on paper’ and affordable and sustainable monthly payments is far higher on the list of household priorities. As the impact of fuel, food and energy price continues to hit the role of mortgages brokers will become more and more crucial.” 

Nicky Stevenson: “The Bank of England and the Government don’t appear to be singing from the same hymn sheet.”

Nicky Stevenson, managing director at national estate agent group Fine & Country

“The Bank of England and the Government don’t appear to be singing from the same hymn sheet.

“Rate-setters are taking money out of people’s pockets in an effort to cool the economy, while at the same time Liz Truss and her team are signposting their intention to radically overhaul the tax system in an effort to boost growth.

“While many forecasters are trimming their expectations for future house price gains following a series of interest rate hikes, the effects of this monetary tightening could well be mitigated by the cuts to Stamp Duty expected to be announced as part of the mini-budget.

“Against this backdrop, we expect the debate over the Bank’s independence to intensify in the weeks ahead.”

Adrian Anderson, Director of property finance specialists, Anderson Harris:

“The Bank of England have increased UK interest rates to 2.25%, this is a 50 basis points hike and takes borrowing costs to their highest levels since November 2008.

“The Bank’s monetary policy committee were split 5-4 on the rate hike. Experts are anticipating more large rate hikes later in the year and into 2023 which is going to heap misery on mortgage payers and have a severe impact on households’ disposable income.

“The message to mortgage borrowers is very simple – don’t wait, take action now as its likely the situation will get worse in the short term. Borrowers are actively shopping around and seeking to fix their mortgage payments now before the monthly mortgage pain gets even worse.

“This is a huge reality check. The landscape has changed quickly, we are no longer living in a period of ultra-low interest rates with plenty of disposable income; our outgoings are increasing faster than our income and we are going to have to adjust quickly and get used to the new norm.”

Simon Webb, managing director – capital markets and finance at LiveMore:

“Today’s hike in Bank of England base rate, while widely anticipated, still means they are the highest they’ve been for a generation.

“There are many people for whom this will cause real financial hardship, particularly coming on top of escalating energy and food prices. While much focus is put on the younger generation, there are many people over 50 who will be really worrying about how they are going to make ends meet.

“Of particular concern are people who are coming to the end of a mortgage fixed rate term, who are facing huge leaps in their mortgage payments and mortgage prisoners who are often at the mercy of a lender’s rising standard variable rates. This rise leaves a lot of people increasingly vulnerable.”

“The inflation challenge is a difficult one given that much of the inflationary pressures the UK is facing are due to global factors rather than domestic consumer overspending.

“The Bank of England needs to walk a fine line between trying to manage inflation whilst not slowing the economy too much.  Another factor is the response of other central banks around the world to inflationary pressures which is having an impact on the value of the Great British Pound.”

Scott Taylor-Barr, financial adviser at Shropshire-based Carl Summers Financial Services: 

“This was a masterclass in political manoeuvring from the Bank of England. Allow rumours of a 0.75% increase to run wild and then, when you only raise it by 0.5%, we all feel we’ve dodged a bullet.

“In terms of mortgage borrowers, the rate rise will filter through to those on variable rates over the coming days and weeks, but for those on fixed rates nothing will change.

“For now. Lenders have already increased rates on their new business deals in recent weeks, pre-empting this rise, so it’s unlikely we’ll see any dramatic market shifts. This increase was a surprise to no one.

“The real issue however is the push-me-pull-you that appears to be happening between the Bank, who are increasing interest rates to try and stem inflation, and the Government, who are injecting cash into the economy in terms of energy price caps, direct support with energy bills and tax cuts. All these moves are likely to increase inflation and so undermine the Bank’s attempts to control it, potentially, leading to further rate rises.”

Anil Mistry, director at Leicester-based broker, RNR Mortgage Solutions:

“This latest rate hike will mean a sizeable increase in mortgage payments is on the horizon for borrowers who fixed in the last two or three years at historically low rates.

“Coupled with the increased cost of living, this latest rate rise will hit most household budgets big time. Borrowers need to speak to a broker as soon as possible to have their circumstances and mortgage reviewed to make sure it is still within their budget, and be protected from any further potential increase later this year.

“How this impacts the property market will depend on what the Chancellor decides to do with regard to the Stamp Duty rules. If there is a holiday, this may increase demand and in turn increase house prices like what we had after the first lockdown.

“However, buyers will potentially end up paying more for the house than the saving in stamp duty. This will lead to a greater mortgage debt and a higher interest rate, so the borrowing will cost more in the long term.”

Michael Webb, managing director at Mortgage Republic

“The Bank of England base rate rise of 0.5% to 2.25% will sharply increase the cost of living pressure on those needing to renegotiate their mortgage due to a fixed rate ending or considering getting onto the property ladder.

“We have a whole generation of adults, specifically those under the age of 30-35, who in their lives have only known low rates. We are now entering a prolonged period of change, where rates are rising month on month, and this will no doubt cause anxiety for those at greatest risk to these market changes.

“Anyone with a mortgage product that is expiring within the next six or seven months should already be investigating their options. Those with longer periods to run on their fixed rates should begin to look at their overall financial profile and make savings where possible to free up funds for a likely payment shock.”

Emma Hollingworth: “Securing rates quickly, before they disappear and are replaced, is likely to become an increasingly important factor for homebuyers and those looking to remortgage.” 

Emma Hollingworth, distribution director at MPowered Mortgages:

“Today’s decision is indicative of the pressure building on the Bank of England as it faces the highest inflation rate in decades and a new government keen to cut taxes to stimulate the economy.

“Securing rates quickly, before they disappear and are replaced, is likely to become an increasingly important factor for homebuyers and those looking to remortgage. 

“MPowered Mortgages has worked out that a homeowner could save over £2,000 over a 2-year period if they lock into a deal now, if mortgage rates rise alongside the base rate by a further 0.5%. 

“In the current climate where mortgage rates and the cost of living continue to rise, borrowers may choose to consider longer-term fixed rate mortgages so that they can have certainty over their monthly mortgage payments over a longer period. 

“Remortgage customers are not always aware they have a three-month window to secure a new deal. Therefore, homeowners must plan ahead and lock in rates at the start of their remortgage window versus waiting to the last minute. This could save them thousands given the rate in which interest rates are increasing.  

“At MPowered Mortgages, we are focused on using AI to speed up and improve the mortgage process, giving consumers a smoother experience of getting a mortgage.

“To support homebuyers and remortgagers in the face of the ongoing economic headwinds, we offer a free valuation on every application and have launched a range of remortgage cashback products in our prime residential mortgage range specifically aimed at reducing the overall cost of buying or remortgaging a home because every little helps. 

Jamie Lennox, director at Norwich-based mortgage broker, Dimora Mortgages: 

“With more large increases almost certainly to come, it won’t be long until millions of homeowners are financially crippled. We’re soon going to hit the main wave of customers coming off ultra-low 1% deals facing the realisation that their mortgage payments are increasing by hundreds of pounds per month.

“People will argue rates are still low versus the 90’s and early noughties, but this period can’t be compared. Back then you could buy a house for the equivalent of two Freddo bars whereas now house prices have never been so disproportionate to the average salary.

“Many first-time buyers are already reaching the point that when you quote a rate they’re deciding it’s too expensive to proceed with the house purchase they had planned and this move is surely going to damage the possibility of people getting onto the housing ladder in the near future.”

Graham Cox, founder of the Bristol-based Self-Employed Mortgage Hub

“The 0.5% hike in Bank rate seems overly cautious. The Federal Reserve raised rates by 0.75% yesterday. Seeing as we haven’t followed suit, it’s likely the dollar will strengthen even further against sterling.

“As imported energy is priced in dollars, this will cause UK inflation to increase. If the Bank of England base rate hike was designed to quell inflation, it seems a strange way to go about it. In the USA, Fed chair Jerome Powell has predicted a ‘correction’ to house prices, and they are likely to fall in the UK, too. Particularly as mortgage rates could be hitting 5% in a few months.”

Marcus Wright, MD of independent mortgage broker, Bolton Business Finance:

“The Bank of England was asleep at the wheel when inflation started rising in 2021 and is now hammering borrowers with another 0.5% rise. This will do nothing to bring down the global price of gas, oil and energy, which are the current primary drivers of inflation.

“However, what it will do is increase further the cost of mortgages and other borrowing for homeowners, businesses and landlords. The only benefit I see is that is may help prop up the falling pound against the dollar, which can help make imports (including energy) cheaper.”

Ross Boyd, founder of the always-on mortgage comparison platform,

“The rate increase of 0.75% didn’t come but this is still a big hike and will ripple throughout the property market. All eyes are now on Friday’s mini-Budget and any changes to Stamp Duty. Yes, rates are still low compared to their historical average but a huge amount of homeowners and buyers have never known rates this high.

“Factor in the impact of skyrocketing inflation and an economy that’s teetering on the edge, and you have all the ingredients for a serious slowdown in transaction levels as people buckle up for a turbulent twelve months ahead. It’s no surprise we’re seeing a significant number of people on our platform choosing to pay an Early Redemption Charge in order to lock in before rates rise further. In the current property market, more people than ever are playing the percentages.” 

Rhys Schofield, managing director at Belper-based Peak Money: 

“If you’re already on a fixed rate deal with some time left to run you don’t need to worry too much, although if I had any spare cash I’d be overpaying each month to bring the balance down so that in a few years’ time the inevitable increase in your repayments stings a heck of a lot less.

“If you are on lender’s standard variable or have a fixed rate ending within the next six months, you may want to call a mortgage broker as rates are going up by the day. I have one client where securing them a new rate just a week earlier is now saving them over £350 a month in interest.”

Lewis Shaw, founder of Mansfield-based Shaw Financial Services:

“This is more of the same from the Bank of England with another 0.5% rate rise. The plan is death by a thousand cuts, or in this case, rises. Let’s hope that it at least strengthens Sterling, which has been under pressure for months.

However, be under no illusion we still haven’t seen the worst of what is to come. With mortgage rates continually on the up and no real signs yet of inflation coming under control, the only lever available to Andrew Bailey and the MPC is to raise rates. We need to hope that this doesn’t trip us into a nasty recession, which it has every chance of doing.”

Rob Gill, founder of London-based Altura Mortgage Finance: 

“This hike of 0.5% is less than expected, and less than the 0.75% delivered by both the US Fed and the ECB. It indicates the Bank of England is balancing the risks of inflation and an economy still recovering from Covid and being hit hard by the cost of living crisis.”

Imran Hussain, director at Nottingham-based Harmony Financial Services:

“If you’re currently on a fixed rate mortgage, you have nothing to worry about until your deal comes to an end. Then you could be in for some serious rate shock. I can see many lenders repricing quickly, and often at the drop of a hat.”

Alex Maddox, capital markets & digital director at Kensington Mortgages:

“This is a good first step, although 0.75% might have been a better step, towards getting the Base Rate from 1.75% to a level more in line with long-term history and the current level of inflation.

“Market consensus is for peak base rates of almost 4.75%, so there will need to be many more steps of this size if the market forecast is correct.”

Andrew Gething, managing director of MorganAsh: 

“In the current climate, it should come as no surprise to see the Bank of England raise interest rates for the seventh time in a row up to 2.25%.

“It will undoubtedly feel like another blow for borrowers, house buyers and mortgage holders, especially those coming to the end of a fixed rate term who will be looking at a hike in rates, or those with tracker mortgages or on Standard Variable Rates.

“As the cost-of-living crisis continues to bite and more consumers potentially struggle to keep up with payments, a further rate rise could push more consumers into the ‘vulnerable’ category. It’s an important reminder to the sector to ensure systems are in place to identify when customers are vulnerable and protect those who are. 

“As homeowners explore their options and many fixed rate mortgages mature in the coming months, identifying and monitoring vulnerable characteristics will become just as important as affordability checks or finding the right criteria. After all, brokers, lenders, advisers and intermediaries are duty bound by the upcoming Consumer Duty regulation to ensure they deliver good outcomes for customers. 

“That means if bank rates do continue to rise this year as expected, businesses must pay extra attention to monitoring consumer characteristics throughout the customer journey and the life cycle of the product.”