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Base rate rise “no surprise” says Skipton

Skipton says the strength of economic data in December means it comes as no suprise that base rates have been hiked in Janaury, a month earlier than expected.

John Goodfellow, chief executive of Skipton, says: “It was previously thought that, were the rate to move, February would be the month it would happen.

However, the strength of economic data released during December – especially the high inflation numbers for both consumer price inflation and average earnings – and strong housing market indicators, mean that todays announcement comes as no surprise.

It will be very interesting to read the minutes of this meeting, to see whether they reveal the Monetary Policy Committee in an overall hawkish mood, with the implication of further increases, or if this is simply a one-off move and rates will remain at 5.25% for a while yet.

“As the society with the lowest interest margin, we are keen to ensure that both investors and borrowers benefit from our competitive advantage, so we are currently reviewing our options to ensure a fair balance of rates across our product range.

We hope to make a decision regarding Skipton rates next week.

It is worth pointing out that any delay in making possible increases to lending rates is in the interest of our borrowers, although those with both mortgages and investments tracking the base rate will see their rates reflect the full rise, with effect from January 26.”

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