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Interest rates and you

ended 03. November 2022

Today, the Bank of England is set to increase interest rates sharply, potentially by as much as 0.75%-1%. It's doing this to control inflation but it will clearly put a lot more pressure on people with tracker mortgages or those set to remortgage soon. Rising rates mean landlords may also be forced to put up rents, piling pressure on tenants, too. Today's interest rate rise will also suck more money out of the economy, as people's disposable income falls even further, hitting small businesses and charities hard. If you're worried about rising mortgage rates or will be affected by today's rate rise in any way (personally, and/or through reduced sales or donations) and are happy to be featured in the local and national media or talk on radio and TV, tell us about it as journalists will be looking to interview people throughout the day and rest of the week. Clearly your business or charity would be featured if you are happy to chat.

8 responses from the Newspage community

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Editor
Riz Malik
Independent Financial Adviser at R3 Wealth
Today's increase is going to hit millions around the country. Homeowners coming to the end of their mortgage deals will feel the impact as will the business owners who are the backbone of the UK economy. However, there is one saving grace. If she-who-must-not-be-named was still in power, the hike would be a lot worse.
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Premium
Debbie Porter
Managing Director at Destination Digital Marketing
Taking more money out of people’s pockets will hit the economy further as less and less of it circulates. Small businesses, the High Street and charities will be taking the brunt of the burden once again. There is a great economic reset happening and all we can to do is watch on with horror as we lurch from one mismanagement of the economy to the next.
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Alastair Hoyne
CEO, Finanze Capital at Finanze Capital
I would be happy to comment of behalf of my business which is affected primarily negatively but does yield opportunities with the right initiatives. We have been discussing expected rate rises with long term customers for over a year now so hopefully it's no surprise to many of them. However a lot of the newer ones have been holding their breath fatefully in our view. Best to reach out to me directly on: agh@finanzegroup.com
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James Miles
Director - Mortgage Adviser at The Mortgage Quarter
Is increasing rates really bringing inflation under control or just putting more stress on the already skint UK public. We’ve got energy companies publishing recording breaking profits but the Bank Of England see it just to penalise the working man. Inflation is being driven by a supply short fall due the outside factors such as the Ukraine war so more needs to be done to fix this. Increasing rates is the only tool at the BOE disposal so we need Rishi to step in and start issuing some meaningful policies.
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Legend
Julia Usher
Managing Director at Ashes Memorial Jewellery
" As a small manufacturing and ecommerce jewellery business, the impending news about the further interest rise is of grave concern. We have found the past four months the most challenging in our company's history. Sales have been diabolical, with a decrease in sales of 38% year on year. I have been in the retail jewellery industry for 20 years and I have never been more anxious about the economic situation we currently find ourselves in. Christmas is vitally important to us as over 70% off our annual turnover happens from now onwards. With the further increase in interest rates this could lead to retail armageddon for many small retailers and big trouble for us. For our business, sales are far worse now than they were during the pandemic. We are very much in the luxury retail sector and understandably we are not at the forefront of people's minds at the moment. People simply are not spending currently on anything that is not essential. Our site traffic is up but the conversion rate is shockingly low. The way things are heading will lead damage High Street retailer further and many small online retailers will not survive to Christmas at this rate. Like many small businesses right now I am fighting hard to survive." I would be delighted to get some coverage and have a rant!
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Mark Green
Business Owner at DJ Mark Green
Feeling lucky. Managed to secure a fixed rate mortgage in the summer and get out of rented. The high street banks wouldn’t take my low turnover Covid year as an anomaly, which meant I had to go with a slightly higher rate from a more specialist lender. I was a bit pissed of at the time, but now I feel like I’ve hit the jackpot.
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Mark Robinson
Managing Director at Albion Forest Mortgages
Rising mortgage interest rates have already begun to push rental prices up as landlords need to hit certain stress tests on the rental figure in order to be approved for their mortgage. This has led to many turning to homeownership with help from parents, using schemes like Joint borrower sole proprietor, and gifted deposits. Even parents using equity release in order to give children a deposit. The government could step in relatively safely with a scheme to guarantee against negative equity and maybe allow lenders to drop minimum deposits to 2.5% to help first time buyers getting on the property ladder. With house prices the way they are a 5% deposit is a lot more money than it was 20 years ago.
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Legend
Sara Hall
Founder at Lilibet & Phil Publishing House
Small, handmade business owners have always had the ability to make extra money for their families, by utilising their creative skills. With the Nation tightening its belt across the board, our customers are abandoning us. When it comes to choosing between heating and eating, the gift industry is the first to go, leaving creative businesses and gift shops wondering what hit them. Sales are down everywhere, and small businesses are closing on a daily basis, as they struggle to pay their personal bills and keep the lights on. Gift shops simply cannot plan for the future, with rising costs of utilities as well as spiralling material costs. With no end in sight, it is hard to stay positive. The conversation within my marketplace is turning bleak, as many of my sellers are reporting struggles with their mental health. You have to understand that makers, arts and creatives are intimately connected with their work. The current situation has them doubting their abilities, which in turn leads to a loss in confidence at best, at worst full blow depression.