News - Interest rates rise to 5.75 per cent

July 5th 2007 - The Bank of England's Monetary Policy Committee have again raised the UK's basic interest rate by another quarter per cent, taking it to 5.75%. This is the fifth interest rate rise in a year, introduced in an effort to curb the UK's inflation rate. The last change in the interest rate was an increase of 0.25 per cent to 5.5% in May 2007.

There are concerns from the manufacturing industry that successive interest rate rises will weigh heavily on homeowners and affect consumer spending. Although the property market remains strong, mainly due to the lack of supply and high demand, consumer spending has been seen to be dropping gradually. There are fears that by the end of the year the interest rate will have climbed to 6 per cent, which will hit mortgage payers hard. An average £100,000 repayment mortgage will now cost the homeowner an extra £16 a month.

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