The Bank of England (BOE) has raised its key bank rate by 0.5% to 5%, citing inflation as the reason for the decision. The BOE warns that this increase may lead to higher mortgage and loan payments for households. A study by the National Institute of Economic and Social Research (NIESR) reveals that the rate hike could push millions of British households into insolvency. NIESR economist Max Mosley suggests that the government should provide support through forbearance agreements to help households and lenders create payment plans. The NIESR research emphasizes the significant impact of the rate increase on households, particularly in Wales and the North-East. The study predicts that 6% of households will become insolvent by the end of the year due to rising mortgage repayments. The BOE states that those with fixed-rate loans will not be affected until the end of their fixed period, while individuals with variable-rate loans may experience increased costs. Approximately 1.4 million mortgages in the UK operate on variable rates.
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