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Bank of England increases base rate to 5 per cent

The Bank of England’s Monetary Policy Committee has raised the base rate to 5 per cent, as had been predicted by a number of commentators.

It is the second rise in the last three months after the decision in August to increase the rate from 4.5 per cent to 4.75 per cent. That followed a benign previous 12 months were the rate did not move.

Portman Building Society group development director Matthew Wyles says: “This rate increase was a racing certainty and has already been factored into the pricing of most fixed rate mortgage products.

“It is clear that the MPC intends to ratchet rates upwards until our exuberant housing market loses some of its momentum. The impact of this strategy on less resilient sectors of the economy will be considerable.”

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