Interest Rates: Bank of England Makes Historic Cut to 4.75%
The Bank of England has finally pressed the pause button on rising interest rates, dropping them from 5% to 4.75%. While this is good news, don’t get too excited – rates are still much higher than what we’ve seen in recent years.
Here’s some interesting information about this cut and what it could mean for you:
Got a mortgage?
If you’re paying off a £200,000 home loan on a tracker or variable rate, you’ll save about £30 each month. That’s enough for a nice takeaway or to help with the weekly shop!
Saving your pennies?
If you’ve tucked away £10,000 in savings, you’ll earn roughly £25 less in interest over the year. Not ideal, but it won’t break the bank.
Borrowed some money?
Imagine you’ve borrowed £100,000 – your monthly payments could drop by about £20. It might not sound like much, but over a year, that’s money back in your pocket!
The good stuff doesn’t stop there:
Perhaps you’re mortgage hunting? You now might find slightly better deals.
Credit cards and loans could be a tiny bit cheaper but make all the difference, whether it be a new loan or a loan to consolidate debt, every little helps, right?
Running a business? This might be your moment to borrow for that expansion you’ve been dreaming about.
Think of it this way:
This 0.25% cut is like turning down your heating just a touch – you’ll feel the difference, but it won’t transform your world overnight.
It’s just the Bank of England’s way of trying to give everyone’s wallet a bit more breathing room.
Things to consider if you’re running a business:
- Boost marketing efforts to target customers that now they have a little extra cash in their pocket
- Re-evaluate your savings to ensure you’re getting more bang for your buck
- Keep in mind the upcoming budget announcement could impact on future wage expenses
Get your accounting in shape
See our packages for more on how we can help you and your business navigate interest and tax changes
