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In the News

UK Interest Rates Climb to 4.5% - Highest since 2008

Geoff Riley

12th May 2023

Unsurprisingly, UK monetary policy interest rates have ticked upwards again, reaching 4.5% after today's Bank of England announcement. However, the Bank is also of the view that inflation is going to fall more slowly in the months ahead as food prices - a key part of core inflation - remain stubbornly high. And this might also mean that interest rates remain higher for longer too.

UK policy interest rates rise to 4.5%

Larry Elliott looks into his crystal ball and attempts to predict the future direction of travel. His conclusion? That the bulk of recent rate rises have yet to filter through to consumers, and as such there haven't been many changes to behaviour. As a result, he thinks that the Bank is likely to adopt a wait-and-see approach before raising rates again, although depending upon how things pan out this could alter.

The excellent Jack Barnett writes in City AM

The increase in the Bank rate to 4.5% from 4.25% means those on a typical tracker mortgage will pay about £24 more a month. Those on standard variable rate mortgages face a £15 jump.

Bigger stories brewing perhaps

Geoff Riley

Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.

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