One of Shropshire’s leading finance companies says homeowners and prospective buyers should not panic over the recent hike in interest rates.
Q Financial Services, which has its offices in Wellington and Shrewsbury, said the increase in rates from the historic low of 0.1% to 0.25% should have minimal impact in the short term.
However Q director Mitchell Gough says further rises are likely in the months ahead as the Bank of England fights soaring inflation – and urged households to review their own budgets in the new year.
“With inflation continuing to rise sharply, we’re not surprised by the Bank of England’s decision to increase interest rates.
“We’re confident, however, the rise won’t make too much of a difference particularly against the very low rates we have seen over recent years and households should therefore not feel the need to panic.
“There are still many attractive offers available for borrowers in the way of fixed rate mortgages and we are of course always happy to advise any individuals who are concerned about the current increases and the impact this may have on their financial situation.”
The Bank of England rate rise – the first in three years – came as new figures showed prices are rising at their fastest rate for ten years with inflation reaching 5.1 per cent.
The Bank has a duty to keep inflation to 2% or lower and acted despite the rapid spread of the coronavirus Omicron variant and the uncertain economic outlook for 2022.
Mitchell added: “We will be watching eagerly to see what happens next. It is likely that further modest increases in interest rates will be needed in the coming months to help the Bank of England achieve its 2% inflation target.
“With this in mind, families already feeling the pinch ought to be prepared for tougher times ahead and we would urge all individuals to undertake a review of their personal finances at the start of the new year.”