Following today’s announcement from the Bank of England that Base Rate will rise to 0.75%, Les Cameron (pictured), financial expert at M&G Wealth, said:
“What remains to be seen is whether this rise in base rate will translate to higher rates available to savers or to increased borrowing costs.
“With the current high levels of inflation we’re experiencing, a modest increase to savings rates would still mean that most cash or near-cash savers, for example National Savings & Investments, would see their wealth being eroded in real terms. Of course many of those with cash savings are pensioners who spend a higher proportion of their savings on energy costs, which we know are increasing at a much higher rate even than the headline inflation rates. The increasing cost of living, as evidenced by the 54% increase in average energy bills announced recently, will mean those repaying debt that is not on a fixed rate will no doubt feel the pinch even more if rates rise.
“With higher inflation and potentially higher borrowing costs, reviewing finances to make sure you’re prepared for the future has never been more important and, for many, that will involve seeking some form of professional financial advice.”