UK interest rates rise latest - what banks are doing

The base rate is the Bank of England's official borrowing rate, which influences what borrowers pay and savers earn. Thursday's increase is the first since July 2007 - it means many mortgage payers could pay around £200/year more per £100,000 they owe, but savings rates will also increase for many.

The Bank’s nine-member Monetary Policy Committee – which sets the base rate – voted by 7-2 to increase the rate. It said it had raised the rate in a bid to lower inflation to the 2% target, after the Consumer Prices Index, a key measure of inflation, rose to 3% in September.

We've published a full briefing on what the changes mean for you. See below for specific info on how your bank will change mortgage rates and savings rates (we'll update this when we get more)

Martin: 'There’s still a window of opportunity to get current cheap deals'

MoneySavingExpert.com founder Martin Lewis said: "Millions of people on variable mortgages will see a direct increase in cost of roughly £200 a year per £100,000 of outstanding mortgage.

"And most lenders will pass on the full 0.25% if not more. Lenders change their standard variable rates not only based on interest rate moves, but for their own competitive advantage. Do not be surprised if some lenders use this move as an opportunity to sneak rates up further maybe, 0.3%.

"The bigger picture though is this is likely to be the beginning of the end of uber-cheap mortgages. New fixes are already a tad costlier as the market's anticipated rate rises; yet for now, deals are still incredibly cheap. And it’s important to understand that most lenders set aside a tranche – say, £30m-worth – that they're willing to loan at the current rate.

"Those deals stay till that tranche is gone, so if rates do rise, there’s still a window of opportunity for the next couple of weeks to get current cheap deals. Everyone should check to see if they’re overpaying."

On savings, he said: "Low interest rates have been a plague for many with savings, especially those who've retired and expected to live off the interest. So rate rises are generally good news for them – indeed we’ve already seen rates crawl up in expectation.

"The top easy-access deal is now 1.3%, compared to just 1% a few months ago. This means I doubt we’ll see the top best-buys rise by the full 0.25% over the next few weeks. With a little bit of crystal ball-gazing I’d say we’ll see them max out at 1.4% to 1.5%.

"Yet many people have money in savings accounts already paying pitiful, spitworthy rates like 0.1%, and they are unlikely to rise. Those in a middling account paying about 0.5% may see an increase over the next few weeks. But if you're earning less than 1%, it's a crap account anyway so you should ditch and switch."

What does the rise mean for mortgages?

If you're on a fixed-term mortgage you won't see any immediate change - though if your deal ends soon, the one you move to may cost more.

If you're on a standard variable rate (SVR) or 'discount' mortgage, the rate is set by the lender, but your mortgage is likely to get more expensive. If you're on a tracker mortgage, it definitely will - as the name suggests, these 'track' the base rate.

A 0.25 percentage point rise could cost roughly £200 a year more per £100,000 of outstanding mortgage. For full help see our Remortgage Guide.

What each lender decides to do in the wake of any interest change is key. Here's what we know so far - also see our Some tracker mortgage rate rises to hit TODAY MSE news story.

This table was last updated at 11am on Thursday 9 Nov.

What mortgage providers are doing

To see the likely impact on you see our Ultimate Mortgage Calculator.

What does the rise mean for savings?

For savers the interest rise is good news, as many - though not all - will see interest rates rise as a result. If your savings are earning anything less than 1% you should consider ditching and switching - see our constantly updated top picks see our Top Savings Account guides.

Again, what's key here is what each individual savings provider does. Here's what we know so far - again, we'll be updating this and adding banks throughout the afternoon, so if your provider's not given an answer yet, check back.

This table was last updated at 11am on Thursday 9 Nov.

How savings rates will change

The base rate explained: watch the video

For a quick explanation of what the base rate is and what Thursday's change means, watch our video below:

What does the base rate cut mean for student loan repayments?

One lesser-known impact of the base rate change is that it could help determine some student loan interest rates.

The rate for those who graduated between 1998 and 2011 in England and Wales (and post-1998 graduates in Scotland and Northern Ireland) is either the previous March's inflation (RPI) rate or the UK base rate + 1%, whichever's lower.

March 2017's inflation rate was 3.1%, so the base rate + 1% is still lower at 1.5%. The interest rate change will take effect from 1 December 2017.

For more on how these repayment rates are set, see our Should I Repay My Student Loan? guide.

Will there be another rise?

There's not likely to be another one immediately.

On the timing of the next rise, Bank of England governor Mark Carney said: "The Monetary Policy Committee continues to expect that any future increases in interest rates would be at a gradual pace and to a limited extent."

Martin also thinks another rise isn't imminent. He said: "What was missing from the Bank of England's statement was that interest rates will have to rise faster than expected, which it was expected to say. So that subtly signals that we perhaps won't see any more interest rate rises this year, and any further rises will be deeper into 2018 than was previously expected."

See the MPC's decision for more information.