Bank of England holds interest rates at 5.25% in May 2024
The Bank of England has decided to keep interest rates at 5.25%, marking the sixth consecutive time they’ve maintained this level.
This decision was largely anticipated, with many economists now suggesting that the Bank of England may cut rates either in June or August this year.
How do interest rates affect me?
Put simply, interest rates affect the cost of borrowing and returns on savings. The Bank of England’s base rate is what it charges other lenders to borrow money. This rate is then passed down to consumers through various channels such as the cost of mortgages, credit cards and loans, and the interest earned on savings.
A few ways higher interest rates can affect you:
- If you have savings, high interest rates could mean better returns on your money. However, this may take some searching, as banks can be slow to pass on the benefits of higher interest rates to saving accounts
- If you have a variable-rate or tracker mortgage, or are looking for a new fixed-rate deal, you might face higher rates
Commentary from Tobias Gruber
Founder and CEO of My Community Finance, Tobias Gruber, said:
“The Bank of England’s decision to hold the base rate has given savers more time to get their finances in a row. With rumours from the market swirling that interest rates could be cut as soon as next month, savers must act fast to secure the best deals before they vanish.
Recent cuts to easy-access accounts highlight the need for quick action. Savvy savers should consider locking their money away into a fixed-rate savings account for guaranteed returns over a set period to beat any potential interest rate cuts on the horizon.
Many savers tend to keep their money in familiar places out of habit, potentially missing out on better opportunities. By proactively reviewing their options and moving their funds from traditional high street banks to an online challenger bank, credit union or building society, savers can maximise their returns and avoid losing out on potential gains.”
About Tobias Gruber
Tobias Gruber is the founder and CEO of My Community Finance. For three decades, he’s been a prominent leader in investment banking and asset management for some of the sector’s most renowned banks, including Credit Suisse, SwissBank, JP Morgan and Morgan Stanley.
In 2018, Tobias launched My Community Finance to provide access to credit for those overlooked by traditional lenders. The platform connects customers to credit unions, where they’re able to access competitive loan products.
