How will rapidly rising interest rates affect you?

This is Money Podcast

This is Money

Business News, Business, Investing, News

4.1 • 650 Ratings

🗓️ 20 June 2022

⏱️ 60 minutes

🔗️ Recording | iTunes | RSS

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Summary

Base rate has gone from 0.1 per cent to 1.25 per cent in the space of six months, in a flurry of rate rising that would have been considered unthinkable a year ago.

Yet, as the Bank of England delivered another 0.25 percentage point raise, voices were raised in some corners to demand why it hadn't gone further.

Why not a 0.5 per cent jump or even a 0.75 per cent one, as the Fed had delivered in the US?

With inflation running at 9 per cent and expected to head north into double digits, the onus is on the Bank of England to show it has a grip and we aren't heading back to the 1970s.

But is rapidly raising rates the right thing to do and how will it affect savers, borrowers and investors?

On this podcast, Georgie Frost, Lee Boyce and Simon Lambert discuss the case for and against rate rises and what the impact is for the economy and people.

Mortgage rates have risen even faster than the base rate, so what can those who need to remortgage do - and will this sink house prices? The team assess the prospects for the property amrket and offer their tips on what borrowers should do to prepare and protect themselves.

Meanwhile, over in the US, it's the stock market that's suffering as rates rise, why is that and how bad could this bear market be?

And finally, petrol prices keep hitting record highs and we want people to switch to electric cars but the government has swiped away the £1,500 grant that helps people buy more affordable models. Will that make a difference, or has electric car demand reached a level where ditching a bung to help out is wise?

Transcript

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0:00.0	Welcome to This Is Money podcast. I'm Georgie Frost and joining me and Simon Lambert today is Deputy Editor Lee Boyce.
0:09.2	And coming up, rates are on the rise across the world, but how high will they go?
0:14.1	As Wall Street slips into bare market territory, what does it mean for investors and how long will it last?
0:19.7	Simon and Lee pour over the ins and outs to the latest move by the US Fed and the Bank of England,
0:24.6	and what it will mean for our money.
0:26.6	With rates rising is now the time to lock into a new mortgage deal,
0:30.6	and finally some meaningful rises in the savings market, but way below inflation,
0:35.6	and that's if the cost of living has left us with anything
0:37.6	to put aside. Plus, a new dedicated electric car section for This Is Money launched in the
0:43.5	week that the plug-in grant has been axed, but why and how do you get the best EV energy deal?
0:50.1	Don't forget, you can step out with all the latest breaking money news, just go to this ismoney.com.
0:55.0	com.uk or download the app.
0:57.5	Market updates and conversations around the financial world don't have to be boring.
1:01.8	The Digest and Invest podcast by Eatoro is a great way to tune into what's happening in a fun and easily digestible format.
1:08.7	Discover the Digest and Invest podcast at utero.com forward slash
1:12.2	academy forward slash podcasts. But first, this week, the Bank of England raised the base rate
1:18.0	for the fifth time on the bounce since December as it continues to try to get a handle on soaring
1:23.2	inflation. It's up. 0.25 percentage points to 1.25% the highest level in 13 years. If anything,
1:30.8	the move was more conservative than some had expected, especially after the Fed. Indeed,
1:35.7	those three dissenting members of the NBC wanted to go even higher. More evidence,
1:40.6	if we needed it, that rate rises aren't going to stop here.
1:45.2	Lee Boyce, do you remember the days in the early days of the pod?
	...

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