Issue #037: WTF did the Bank of England just do 😬

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🤑Hey everyone,

I’LL TELL YOU WHAT THE BANK OF ENGLAND JUST FRICKING DID!!!

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THEY’VE ONLY GONE AND DROPPED INTEREST RATES FROM:

5.25% ➡️ 5%

Here’s my current mood off the back of that news:

Okay, enough messing about because this is actually some of the most significant personal finance news impacting your day to day life.

So on that sombering note, I thought I would share quick reminder as to how the interest rate set by the Bank of England mainly effects the money in your pocket!

1. IF YOU ARE A SAVER = NOT GREAT NEWS

If you are saver, then you’d prefer a high interest rate, meaning this drop is not really what you were after!

High interest rates set by the Bank of England mean that banks follow suit and offer you higher interest rates when saving money with them.

You will likely see some banks start to drop their saving rates on various products over the coming days/weeks, so if there is a solid rate you were gonna lock some money in at, you might want to move quick in case it disappears soon!

2. IF YOU ARE A BORROWER = GOOD NEWS

This news is likely to be music to your ears.

This is the first drop of interest rates in over 4 years, and it means that the rates at which banks lend money are likely to start dropping soon.

Most commonly, people who are about to either get a mortgage or remortgage will be very happy as borrowing rates are almost at their highest in over 10 years, and this is the sign that hopefully they are about to start dropping.

HOWEVER,

My best guess is that this drop in interest rates isn’t about to be followed by more and more over the coming months.

This will be used as a test to see how the economy reacts and begins the start of a long journey of interest rates falling from the recent highs.

We aren’t likely to see many more drops this year, and we are even less likely to see interest rates retunr to the sub 1% levels they were at less than 3 years ago.

Most likely, over the coming year or two, we will see interest rates settle at around the 3/4% unless something drastic happens to change that (like a huge recession or another inflation spike)

VOTE 👇

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^{DISCLAIMER: None of the above is financial advice. This newsletter is strictly education and should not be taken as investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and always do your own research.}