Bank of England confirms thirteenth consecutive interest rate rise to 5%

The Bank of England (BoE) has confirmed that interest rates will rise by 0.5%, from 4.5% to 5%, the thirteenth consecutive rise since December 2021.

At its meeting that ended last night, the BoE’s Monetary Policy Committee (MPC) voted by a majority of 7–2 to increase the rate by 0.5 percentage points, to 5%. Two members preferred to maintain the Bank Rate at 4.5%.

Sue Robinson, chief executive of the National Franchised Dealers Association (NFDA), said: “The soaring inflation rates we are witnessing are exerting added pressure on consumers, particularly when it comes to purchasing vehicles.

“Across the country, prospective buyers are confronted with steeper prices, diminishing their purchasing power.

“However, it is vital that the Government continues to take these necessary actions to stabilise inflation.”

Robinson said the automotive sector is “robust” and continues to overcome the unprecedented challenges it faces.

She added: “Private mobility is a necessity to many, and franchised dealers continue to serve the customer’s best interest, offering flexible finance options to support their spending budgets and helping to navigate through the financial instability."

The BoE said in its statement: "The Committee is continuing to monitor closely the impact of the significant increases in bank rate so far.

"As set out in the May Report, the greater share of fixed-rate mortgages means that the full impact of the increase in bank rate to date will not be felt for some time.

"The MPC will continue to monitor closely indications of persistent inflationary pressures in the economy as a whole, including the tightness of labour market conditions and the behaviour of wage growth and services price inflation. If there were to be evidence of more persistent pressures, then further tightening in monetary policy would be required.

"The MPC will adjust Bank Rate as necessary to return inflation to the 2% target sustainably in the medium term, in line with its remit."

BoE will announce the next rate on August 3.