Payday loans and side hustles: Will a freeze in interest rates really help struggling households?
Londoners said the rate freeze did little to solve the cost of living crisis or soaring prices
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Your support makes all the difference.After fourteen straight increases, the Bank of England has held interest rates at 5.25 per cent, after a surprise reduction in inflation.
It is the first time since November 2021 that the Bank has frozen rates but officials have left the door open to further rises in the future, as they struggle to get inflation down to 2 per cent.
Economists and mortgage brokers have predicted that any further increase in rates was ādiminishing fastā and predicted they āare already at their peakā. But with many households still struggling, will the freeze help?
The Independentās Maira Butt took to the streets of London to ask people what they thought of the news, and the reaction was decidedly mixed.
While most felt a freeze was better than an increase, others said it wouldnāt make much difference to the cost of living crisis and soaring prices.
Many felt the Bank keeping borrowing costs at the same rate did not go far enough to reduce uncertainty about their futures.
Laila Brammeld, 27, HR worker
āAt least it gives us some stability which would have been good a couple of months back when I was buying a house. Mortgage rates were up and down every day, one day it was 4.3 per cent which is what we ended up.
āThen literally the following week it went up to 6 per cent. Luckily, we got in just quick enough, but sometimes itās too late for people.ā
Fergal Kilroy, 48, marketing director
āItās good for those on mortgages. I hope it keeps other borrowing down like credit cards.
āTheir pricing is out of control. You donāt feel like your lifeās improving no matter how hard you work. I think we need an election and new leadership.ā
Paulin Shek, 30, software engineer
āI donāt know a lot about it, I feel relieved because my mortgage is getting renewed next year.
āBut the divide between rich and poor is getting worse. Iām quite lucky, my partner and I have a high salary. We feel safe, but thereās another half of society who arenāt.ā
Alex Oyekola, 27, software tester
āI feel good and bad. It shows thereās a curb on inflation. We donāt want rising prices. The cost of living has been a bane for God knows how long, for all of us.
āGood for homeowners but itās been kind of hard for me, Iām trying to be a first-time buyer, and itās been hard with rising interest rates.ā
Mat Batten, 34, developer
āI want to see them do something more constructive than what weāre hearing. I donāt think itās going to help with the cost of things.
āI know people who are doing things they wouldnāt normally have done five or ten years ago, like payday loans and side hustles. Iām hoping to get married next year but it might be the year after given whatās going on.ā
Dan Morrison, 51, money broker
āItās the right thing to do. They were split too, 5 to 4 on the decision, so it was close. Inflation going down yesterday impacted the decision and spooked them.
āRishi Sunak has taken credit for it, even though itās nothing to do with him, but heās an absolute fool isnāt he? People see inflation coming down and think prices are, but it just means theyāre going up slower.ā
Ilias Okoosi, 29, software engineer
āWeāre still seeing inflation rates as some of the highest in Europe. That worries me. Weāre harming so many sections of society but weāre not really seeing the results.
āIām a renter myself. My landlord is going to say āHey, my fees have gone up and weāre going to have to pass that onā. Itās sad to see weāre screwing up the economy but weāre not really dealing with the issues.ā
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