Interest rates up 3.5 per cent, says your mortgage provider

INTEREST rates have gone up 0.25 per cent according to the Bank of England and 3.5 per cent according to your mortgage provider. 

The first official rise in a decade has been taken to control inflation, and the many larger unofficial rises that will follow it are also, in a sense, to restrain public spending.

A spokesman for your mortgage provider said: “Because you’re on a tracker mortgage, the interest rate tracks that set by the Bank of England. Loosely. In a manner of speaking.

“For example, when they reduced interest rates to one per cent we immediately, within 90 days or so, followed them by bringing ours down to 5.49 per cent. We don’t ignore that responsibility.

“And for the last few years, while the Bank’s interest rate has been less than one per cent, ours have remained steady at that multiplied by about 10 or 20. Plus occasional increases to cover costs.

“Now their rate has spiralled up to 0.5 per cent we have no choice but to bring your rate up to approaching double figures. That’s the financial market. You probably don’t understand exactly how it works.

“I’m afraid the interest paid on savings must remain steady at 0.38 per cent, however. Still, if you really save a lot it all balances out.”