Mansfield mortgage broker warns over interest rate rise

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An independent mortgage broker from Mansfield has warned a move by the Bank of England could see people paying more for their borrowing.

Today, the bank increased the base rate by 0.5 per cent – the biggest interest hike since 2008 – taking the current base rate to 2.25 per cent.

This means anyone on variable-rate mortgages may see the cost of their mortgage rise, and it will also have an impact on the cost of debt to businesses which normally have variable-rate loans.

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Additionally, it could feed into higher fixed rate mortgages too.

Lewis Shaw, a Mansfield-based independent mortgage broker.Lewis Shaw, a Mansfield-based independent mortgage broker.
Lewis Shaw, a Mansfield-based independent mortgage broker.

Lewis Shaw, founder of Shaw Financial Services, based at the Mansfield Business Centre, Ashfield Avenue, says the move ‘points in one direction’.

He said: “Things are going to get tighter as the Bank of England tries its best to control inflation and bring it down.

“However, they’re walking a tight rope as too far too fast, and we could be plunged into a nasty recession.”

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The British Chambers of Commerce says that the bank is ‘taking a hard line on tackling inflation’.

David Bharier, BCC head of research, said: “Our research shows unrelenting inflation, largely driven by rising energy costs, is by far and away the top business concern at present.

“But the bank faces an increasingly tricky balancing act. The interest rate is a blunt instrument to control inflationary pressures that are largely driven by rocketing energy costs and global supply chain disruption.

“The bank’s decision to raise rates will increase the risk for individuals and organisations exposed to debt burdens and rising mortgage costs – dampening consumer confidence.”