The increase in the Bank of England’s base rate from 0.25% to 0.5% at the beginning of November represented the first rise in rates in over a decade. Most lenders swiftly announced that they would be passing on the full increase to their variable rate mortgage borrowers.
Low interest rates have been a major characteristic of the savings market for many years, and banks and building societies haven’t been especially quick to pass on the increase. Those with savings accounts will be disappointed to learn that many banks and building societies are reluctant to increase rates, despite Theresa May’s call for rate rises to be passed on to savers. Santander, for instance, has announced to its 22 million account holders that the interest rate on its 123 Current Account is set to remain at its current level of 1.5%.
The minutes from the Bank of England’s Monetary Policy Committee indicated that it was in no hurry to raise rates again, and that further rate rises would be limited.