U.K. Interest Rates Rise

August 3rd, 2006

The big news of the day will not make great reading for many homeowners, as the Bank of England has decided to raise interest rates by 0.25%, to 4.75%.

Despite a raise looking on the cards, I think this will still come as a shock to many people, as it was thought that a rise might only happen late this year or maybe even next year.

The major reason for the change was to keep inflation in check. There has been a mixed reaction from the financial community - shares dropped 1% on the news, but the pound improved against the dollar.

It is the first time that rates have moved in 2 years.

More coverage on the interest rate rise: