Interest rate rise: keep calm and carry on

The Bank of England increased interest rates today for the first time in a decade. The Monetary Policy Committee (MPC) voted to increase the base rate from 0.25% to 0.5%.

Commenting on the move, Darius McDermott, managing director of FundCalibre, said: “This was the right move from the Bank of England. If the MPC didn’t do it now, you would have had to wonder if it ever would.

“Today’s rise comes as a result of inflation having picked up, but the bottom line is that the UK economy is slowing and there is substantial evidence that the consumer is struggling. When you add to the scenario the continued uncertainty over Brexit, I fully expect this to be a ‘one-off’ for now.

“In my view, there is no need for investors to alter portfolios as a result of this change. If banks pass on the rise, cash savers may see a small benefit, but it will be negligible.”

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