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The Bank of England Raises its Base Rate from 3.5% to 4%

The Bank of England raised the base rate again by 0.5%, marking the tenth consecutive increase, bringing the rate to a 14-year high of 4%. Out of the nine members of the Monetary Policy Committee, seven voted to raise the pace, while two voted to keep it unchanged. This increase will result in higher tracker rates, but the good news is that fixed rates have already factored in this change and are expected to continue to drop in the coming weeks. The sentiment is that the base rate might have reached its peak, and inflation may start to decline, leading to a potential decrease in the base rate. Tracker rates have recently been prevalent due to their lower cost than fixed rates, but the gap has now narrowed, and fixed rates have become more appealing. Existing mortgage holders with deals tied to the base rate will now see their payments increase. With all these changes, it’s a great time to review your mortgage options, whether you’re looking to buy or already have a mortgage.

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