Bank of England holds interest rates at 5%

Michael Race
Reporting from the Bank of England

Until last month, interest rates had been at a 16-year-high of 5.25% but are high interest rates bad news for everyone?

Mortgage holders with variable or tracker mortgages, or who are looking to secure new fixed-rate deals, have higher monthly payments.

First-time home buyers may find they are priced out of the market as lending conditions become tighter.

Loans and credit cards that don’t have fixed interest tend to see higher charges.

People with savings should benefit from higher interest rates and get better returns on their money.

Those on the cusp of retirement, might get a better annuity rate. This determines how much guaranteed income you get, when you swap some or all of your pension pot for a secure income.

That’s because providers typically buy government bonds, which will rise in line with higher interest rates.

For the government though, rises in interest rates in recent times means it has had to pay more interest on the country’s debt.