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As it decides on a split vote to raise UK interest rates to a 14-year high of 3.5%, the Bank of England claims that the majority of housing market indicators have continued to weaken.
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In a video clip, Bank of England governor Andrew Bailey discusses why the UK's central bank increased borrowing costs today.
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Because inflation is "too high," according to Bailey (it was 10.7% in November and reached a 41-year high the month before), the Bank hiked interest rates.
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He Says - We predict that starting in the middle of next year, inflation will decline pretty dramatically. The best way we have to ensure that happens is to raise interest rates.
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According to Bailay, a strong economy is one in which people can confidently prepare for the future and in which "hard-earned money preserves its value."
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He agrees that higher interest rates have a genuine impact on peope's lives, but believes that boosting interest rates, "we can get inflation down sooner".
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The decision made today is just more bad news for the roughly 2.2 million homeowners with variable rate mortgages, who already have to deal with a number of price increases.
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Of those 2.2 million, around half are enrolled in a base rate tracker or a discounted rate agreement. The other half is paying the usual variable rate set by their lender
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Naturally, the numbers will be higher for individuals who have larger mortgages. When the mortgage balance is increased to £500,000, the payment increases by $135 (from £3,095 to £3,230).
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