Over the past 30 years, there have been 58 increases in the main Bank of England rate of interest. During this time the rate has changed its name and classification several times, now being termed the Official Bank Rate which is the rate paid on commercial bank reserves.
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According to Legal and General, August is the most likely month for a change, whether it be an increase or a decrease.
Stephen Smith, Director of Housing at Legal and General, said: Borrowers will be waiting to see if they are going to be in the red or the black in the base rate roulette. Rates are still at a relatively low level compared to the 70s and 80s and many people would struggle with todays debts at yesterdays prices. Whilst the boom and bust has flattened out since the turn of the millennium, borrowers are still facing a probable hike in rates in the near future.
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The months of June and August are the most likely time of year for a rise in rates. They are a bit like Park Lane and Mayfair on a Monopoly board, because you just want to get through them without having to pay our more money!
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There have been many more cuts in the Base Rate than rises. During 1982 there were 34 cuts alone, with eight each in July and August. However, since 1992 the Base Rate has not changed more frequently than once a month. Between August a2004 and August 2006 there were only two changes.
The Base Rate is currently 5.25 per cent. If it were to increase by 0.25 per cent it would cost an extra £15 a month on a £100,000 mortgage.
