Bank of England holds UK interest rates at 4% amid inflation concerns as mortgage holders given warning - live
MPC vote latest along with stock market news plus business and finance updates from Thursday
The Bank of England (BoE) has voted to hold interest rates today, as homeowners looking to renew deals were warned to seize on mortgage offers quickly.
Following three rises earlier this year, the BoE announced that the rate would stay at 4 per cent, with the next vote in early November.
But two MPC members voted to cut rates further this time around, indicating there may still be a chance for another drop in rates before the end of this year.
Among the factors which affect the BoE’s decision is UK inflation - which official figures yesterday showed held steady at 3.8% across August, despite food prices rising at a much faster rate.
Elsewhere, Jaguar Land Rover’s woes as a result of the cyberhack in their systems will continue into next month at least, while Microsoft have announced a £22bn investment into the UK in a “tech prosperity deal” and one of the co-founders at Ben & Jerry’s has quit.
Follow The Independent’s live coverage of the interest rates vote plus latest stock markets and business news here:
Bank of England wrap: All you need to know from today's votes
OK, let’s get everything lined up for those who missed the live event. Here’s a recap of what went down and what it means...
Interest rates: The vote was split 7-2, but a hold at 4% was the outcome.
Quantitative tightening: Another split, 7-1-1, but ultimately the bank will slow down its rate of selling bonds.
What it means for...
Savers: Rates should hold above 4.5% for now in the best cases. Make sure your account offers above 4% at least, as that’s where inflation is/will be.
Mortgages: Don’t wait around if you need a new deal. The war between lenders is likely over for now and rates could tick back up a little more.
Businesses: As you were, in terms of borrowing costs - the BCC is demanding no further taxes with firms squeezed on all sides this year.
Interest rates live - Business and Money, 17 September
Morning all and welcome to our latest live blog across the business and finance worlds.
Today we’ll catch up on stock market matters, any further inflation reaction and the latest affecting workers at Jaguar Land Rover.
Our primary focus though is the 12 noon announcement from the Bank of England over interest rates.
Yesterday’s data confirmed UK inflation remained unchanged last month at 3.8 per cent, but consumers are still facing rising food and drink costs on some of the most popular everyday items like coffee and chocolate.
Food and drink price rises have accelerated for the fifth month in a row, in another hit to the poorest households, with the chancellor admitting that many people are “finding it tough”.
The Office for National Statistics (ONS) announced on Wednesday the rate of Consumer Prices Index (CPI) was 3.8 per cent in August, the same as July. This was the level that most economists had been expecting.
However, the rate of food and drink inflation rose to 5.1 per cent in August, from 4.9 per cent in July, as shoppers continued to face higher prices for items at the till.
Among food items, beef and veal has had the biggest annual rise in price, up by a quarter (24.9 per cent) over the past 12 months. Butter is next in line, up 18.9 per cent, while both chocolate and coffee have risen 15.4 per cent in the space of a year. More details on yesterday’s figures here.
Amazon announces above inflation pay rise for staff
Online giant Amazon has announced an above inflation pay rise for its employees.
From the end of the month the minimum starting pay will rise by 5.9% to £14.30-an-hour or by 5.5% to £15.30-an-hour depending on location.
Annual salaries for frontline employees will start at a minimum of £29,744 and up to £31,824 depending on location.
The increase will affect tens of thousands of staff across the UK, said Amazon, adding that its minimum starting pay will have risen by 43% since 2022.
Amazon announces above inflation pay rise for staff
Interest rates: All the key details
Today’s big focus will be the Bank of England deciding on whether to cut interest rates or not. Here’s what you need to know:
When: At 12 noon we get their announcement
What: The nine MPC members vote to cut, hold or raise rates
Last time: In August rates were cut down to the current 4% level
This time: Experts predict no cut today - here’s the detail, reasons and what comes next.
Will interest rates go down tomorrow? Key factors and 2025 predictions
Starbucks employees suing firm over dress code change
Starbucks is facing a legal challenge from their own employees in the US, who say a new dress code came without reimbursements or garments.
A class action lawsuit is a possible route after the company switched up the dress code in an effort to create a “warmer” and more familiar brand.
One employee called the manner of the change “tone deaf” - more details here.
Major lenders joins the cash offer war in bid to win your current account
Lloyds, Natwest, Nationwide.
All three have launched cash switch offers in the past few days, which means they will give you money if you move your current account to them.
The amounts are slightly different and so too are additional perks you get - make sure if you’re considering a switch you choose the one which gives you the best overall deal for your needs, not just the most money up front.
- Lloyds - £200.
- Natwest - £175.
- Nationwide - £175.
Lloyds also give you an extra annual perk like Disney plus or a coffee shop discount; with Natwest you can add an extra £36 across the year with one account type; Nationwide will share profits with their members (customers), often £100 a year recently.
Others like first direct, Co-op Bank and more are also putting £175 plus other perks on the table including access to much higher interest rate savings accounts - that’s 7 per cent in the case of first direct!
Make sure you choose carefully and always read terms to ensure you’re eligible.
Bank of England interest rates: Move your money now
We’re expecting a vote to hold today from the BoE. That doesn’t transpire to consumers to do nothing themselves, however.
“With inflation staying stubbornly sticky, it’s unlikely that the Bank of England will be cutting rates today. But there are ways you can make sure your money is working for you, and not against you,” says Alastair Douglas, TotallyMoney CEO.
Here are his ways to make sure your money is in the right place...
For savers:
“If you’ve not moved your savings recently, it’s likely your bank will be paying you a below-inflation rate, meaning your cash will effectively be losing value. By shifting your money to a market-leading account, you could start earning up to 4.75 per cent.”
For homeowners:
“If your current deal is ending within the next six months, then it’s worth shopping around for a new offer sooner rather than later. If you don’t, then you’ll probably find yourself on your banks Standard Variable Rate – with the average currently at 7.5%. The average two-year fix is 4.75% - and while it’s likely to be more than you’re currently paying, your monthly payments will jump, but not as high. Some brokers will also let you lock in a new offer now, and then switch to a better deal if one becomes available before your one is up.”
For borrowers:
“Interest rates might not be dropping as quickly as we expected, but competition is heating up. Six banks are currently offering up to 34 months interest free on balance transfers, meaning borrowers can press pause on interest payments until July 2028, saving more than £1,700. So, if you’re carrying debt, make sure that the information on your credit report is correct and up to date, check your latest offers, and start saving money.”
Workers affected by Jaguar Land Rover cyberattack told ‘to sign up for universal credit’
The workers’ union Unite is calling for the government to offer a furlough scheme for workers caught up in the Jaguar Land Rover (JLR) cyber attack after some in the supply chain were reportedly laid off or advised to sign up for universal credit.
The union said thousands of workers in the JLR supply chain should have a furlough scheme similar to the one announced this week to support staff at bus manufacturer Alexander Dennis.
JLR was hit by a cyberattack several weeks ago and after an initial shutdown, has recently stated it will be unable to resume production until at least 24 September, while suppliers have been warned that disruption could continue until November.
Staff have been told not to return to work while production lines are still affected.
Full details:
Workers affected by JLR cyberattack told ‘to sign up for universal credit’
Barclays offer switch bonus - on your cash ISA
Potentially one for somewhat older readers who have had more time to add to their savings, but along the same lines as the current account switch offers going around, Barclays has one for your cash ISA.
If you transfer to a Barclays cash ISA with a minimum of £25,000, from another ISA provider, you get between £100-£500 depending on your total pot.
Added to the fixed rates on offer of 3.7 per cent and 4.0 per cent depending on account type, Barclays say the cash bonus effectively lifts the rate to a market-competitive 4.5 per cent in a best-case scenario.
As always, check terms to see what you need to be eligible and that the fixed term deals suit your needs.
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