By Michiel Willems
With the Bank of England Monetary Policy Committee confirming its base rate will rise by 0.5 per cent to 2.25 per cent, UK households face an immediate increase in interest payments of £1.65bn.
Analysis of Bank of England data shows UK households are currently paying £20.25bn annually in interest payments on floating rate debt that are likely to be immediately impacted by an interest rate rise.
With rates rising by 0.5 per cent, that means annual interest payments will increase to £21.9bn straight away, research from audit and tax firm Mazars shows this afternoon.
“The impact of this rate rise will come as a real shock to many households. Billions have been added to UK household’s costs practically overnight,” said Matthew Carter, partner at Mazars, discussing the numbers with City A.M.
“The rising costs for everyday items such as food, fuel and energy have already caused a major headache for many households. Now many will find their mortgage payments increasing substantially as well,” he added.
“It’s likely that we will see heightened numbers of personal insolvencies in the coming months as people struggle to deal with the mounting cost of everyday life,” Carter concluded.
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