UK inflation at a 5 year high

UK inflation is at his highest level for more than 5 years, the cost of living hit 3% in September which is 1% higher than the Bank of England’s target.

The BOE is tasked with keeping inflation at 2%, with this now well above the target it fuels more speculation that interest rates will have to go up in November.

This high inflation is putting strain on households and raising interest rates can curb inflation.

If the Policy Committee do vote to increase interest rates then this will affect homeowners with mortgages on a variable rate, it will also have an effect on the cost of future fixed rates with some major high street lenders already putting their fixed rates up.

It will be good news for savers though as a rate rise will likely increase savings rates.

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