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| UK interest rates raised to 5.75% | UK interest rates raised to 5.75% |
| (11 minutes later) | |
| The Bank of England has raised UK interest rates from 5.5% to 5.75%, its fifth rate rise since last August. | The Bank of England has raised UK interest rates from 5.5% to 5.75%, its fifth rate rise since last August. |
| Its Monetary Policy Committee (MPC) warned that inflation remains a danger, saying "most indicators of pricing pressure remain elevated". | Its Monetary Policy Committee (MPC) warned that inflation remains a danger, saying "most indicators of pricing pressure remain elevated". |
| Some analysts have taken that to mean there may be a further rise this year. | Some analysts have taken that to mean there may be a further rise this year. |
| The higher rates will add £16 a month to an average £100,000 repayment mortgage, but it could be good news for savers who should earn higher interest. | The higher rates will add £16 a month to an average £100,000 repayment mortgage, but it could be good news for savers who should earn higher interest. |
| Charities have expressed concern that higher mortgage costs will leave many borrowers facing difficulties. | Charities have expressed concern that higher mortgage costs will leave many borrowers facing difficulties. |
| HAVE YOUR SAY There are many of us who lived through much higher interest rate periods than this Denis, Leeds Send us your comments What it means for mortgages | HAVE YOUR SAY There are many of us who lived through much higher interest rate periods than this Denis, Leeds Send us your comments What it means for mortgages |
| "We're seeing more and more people coming in for help with mortgage or secured loan arrears," said Sue Edwards from Citizens Advice. | |
| "People are really stretching themselves to the limit to buy a house and take on a mortgage," she told the BBC. | |
| "A small increase in interest rates could just tip them over the edge." | |
| More to come | More to come |
| This rate rise may not be the last one, with Ross Walker at Royal Bank of Scotland warning that the statement from the MPC could herald more bad news for borrowers. | This rate rise may not be the last one, with Ross Walker at Royal Bank of Scotland warning that the statement from the MPC could herald more bad news for borrowers. |
| "The content of the statement is very similar to the one they made in May when they last raised rates," he said. | "The content of the statement is very similar to the one they made in May when they last raised rates," he said. |
| "The markets will take this as a sign that there are more increases to come," he concluded. | "The markets will take this as a sign that there are more increases to come," he concluded. |
| But Trevor Williams from Lloyds TSB Corporate Markets said another rate rise would be too much. | But Trevor Williams from Lloyds TSB Corporate Markets said another rate rise would be too much. |
| "The effects of the earlier increases haven't yet come through," he said. | "The effects of the earlier increases haven't yet come through," he said. |
| "We are at a very delicate stage and the danger now is that they overdo it," he added. | "We are at a very delicate stage and the danger now is that they overdo it," he added. |
| 'Step too far' | 'Step too far' |
| The British Chambers of Commerce agreed that the Bank of England should take its time. | The British Chambers of Commerce agreed that the Bank of England should take its time. |
| "It should allow more time for previous interest rate increases to have their effect before rushing to raise interest rates further, thus inflicting lasting damage on the economy," said the BCC's economic adviser David Kern. | "It should allow more time for previous interest rate increases to have their effect before rushing to raise interest rates further, thus inflicting lasting damage on the economy," said the BCC's economic adviser David Kern. |
| The Bank has now raised interest rates five times in the past year | |
| Business groups say that the Consumer Prices Index (CPI) was likely to return to the 2% target by the end of the year even without this increase. The CPI slowed to 2.5% in May from 2.8% in April. | Business groups say that the Consumer Prices Index (CPI) was likely to return to the 2% target by the end of the year even without this increase. The CPI slowed to 2.5% in May from 2.8% in April. |
| Firms are worried that rising interest rates will continue to increase the strength of the pound against the US dollar, thus making life more difficult for exporters. The pound is currently close to a 26-year high against the dollar. | Firms are worried that rising interest rates will continue to increase the strength of the pound against the US dollar, thus making life more difficult for exporters. The pound is currently close to a 26-year high against the dollar. |
| The Royal Institution of Chartered Surveyors predicts that the rate rise will depress the housing market. | The Royal Institution of Chartered Surveyors predicts that the rate rise will depress the housing market. |
| "This latest increase in UK interest rates will further dampen housing demand going forward as first time buyers find their borrowing constrained," said RICS senior economist David Stubbs. | "This latest increase in UK interest rates will further dampen housing demand going forward as first time buyers find their borrowing constrained," said RICS senior economist David Stubbs. |