The Bank of England’s Monetary Policy Committee (MPC) will be conducting a regular scheduled meeting on 3 November. It could be the eighth consecutive meeting in which there is a majority vote to increase the standard base interest rate. Currently the base rate is at 2.25% after the last increase of 0.50% that occurred from the September meeting. There is an expectation that the next increase voted by the MPC could take the base rate to 3.0% or more.

The first meeting that began the rate hikes was in December of last year. The rate set by the MPC had been in response to the global pandemic which took the rate to an all-time historic low of 0.1%. The economic difficulties during the pandemic had caused a possible expectation that the rate could go to zero, but it remained at 0.1%.

Inflation began to grow rapidly and far beyond the Bank’s target rate of 2.0%. In attempt to control inflation, the MPC voted the hike in December to increase the rate to 0.25%. Further rate hikes were at 0.25% in 2022 until the August and September meetings that resulted in hikes of 0.50%.

The rate of inflation has grown into double digits and is now above 10%, which puts it at over 5 times the target rate. Experts believe the MPC will likely take a more aggressive move to control growth and could increase the rate by 0.75% or more.

The November meeting will come only days after the 31 October budget announcement following Rishi Sunak replacing Liz Truss as Prime Minister.

With inflation at a 40 year high, the MPC is pressured to increase the rate. However, the rate hikes are pushing borrowing to be much more expensive. It is having an impact on borrowers and there is concern of how homeowners will cope. 

Many homeowners borrowed when interest rates were based on the historically low base rate and are nearing the end of their mortgage term if it was a two-year deal. Even those that would end earlier would have borrowed on rates well below the choices now offered.

The demand for remortgages has revealed the desire of homeowners to find relief. Some are so concerned of future interest rate hikes they are choosing to take on a penalty fee to end their remortgage early rather than face higher rates when their deal would end.

Experts encourage homeowners to shop for a remortgage no matter where they are in their term. It is simple and quick to discover what remortgages are available by obtaining quotes online. Homeowners could visit remortgage lender sites to get a quote or visit remortgage broker sites for numerous quotes from many lenders. Remortgage brokers could also have exclusive deals not offered directly from lenders.

Fixed rate remortgage deals are the most popular for homeowners as it will lock in the interest rate to provide shelter from rising rates for the duration of the new term. 

The time to shop for a remortgage is now. While the next MPC meeting is just around the corner, there will be another on 15 December and likely yet another rate hike.