The Bank of England’s Monetary Policy Committee (MPC) has voted unanimously to raise the Bank Rate from 0.5% to 0.75%.
It is only the second time the MPC has increased rates since the financial crisis 10 years ago.
The MPC said it “continues to recognise that the economic outlook could be influenced significantly by the response of households, businesses and financial markets to developments related to the process of EU withdrawal”.
It also stated that any future increases in the Bank Rate are likely to be at a gradual pace and to a limited extent.
Toni Smith, COO at PRIMIS and PTFS, said: “After months of speculation, the inevitable has finally happened – and only time will tell if this is the first of many increases to come or if – with Brexit on the horizon – the Bank of England may choose to reduce them once again.
“Brokers need to be engaging with clients to ensure they are prepared and financially able to adjust to the new rate implications. It is also the ideal time for brokers to speak with clients who are who are approaching the end of their fixed rate, or who have already reverted to their lender’s SVR, to ensure they have access to the most competitive deals still available.”
Benson Hersch, CEO at the ASTL, said: “Today’s announcement that interest rates are rising will as expected have a major impact on longer-term lenders, as they may feel compelled to raise rates. This will affect exit routes for short term loans, but unless there is an expectation of further increases in the medium term, I don’t expect rate rises to affect short term lenders.”