Interest Rates Up Fuel Prices Cap Up
Published / Last Updated on 03/02/2022
It’s time to tighten our belts folks.
CPI Inflation at 5.4% (RPI Inflation at a staggering 7.5%) is clearly hitting our pockets hard. To make matters worse, today the energy price cap was increased by 54% meaning that the average household in the UK will face increased combined gas and electricity bills of over £600pa. That said, the government is expected to introduce a help scheme for poorer households. In addition, the Bank of England is tightening up it’s quantitative easing programme to tighten money flowing into the economy/banking system making it harder for businesses to borrow money as banks will not have as much..
The fuel price increase is going to push prices even higher, not just at home but also for businesses that produce and deliver your goods and services.
In addition to that, the Bank of England Policy Committee has confirmed today, with a majority vote of 5:4 to increase interest rates from 0.25%pa to 0.5%pa, the second increase in successive months, the first time this has happened since the 1990’s. This is to allegedly try and control inflation, but we suspect this will have little impact initially.
In fact, the 5 MPC members that voted for the increase appear to expect rates to increase again by another 0.25% to 0.75%pa sooner rather than later if inflation keeps climbing.
Comment
We should also start preparing for higher costs across the board, not just spending but your mortgage costs too or even of you rent, there are increased costs for your landlord as well as new energy performance improvements hitting landlord properties over the next few years.