How high should interest rates be?MoneySaving Poll Results

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How high should interest rates be?

UK interest rates have been at 0.5% for two years, but calls to raise them are growing. If you were the Bank of England what rate would you set?

Beginners' Interest Rates Briefing

Increasing interest rates encourages saving and discourages borrowing – both mean people spend less, so money is taken OUT of the economy. As we currently have relatively high inflation (price rises) many believe we should increase rates to smooth demand and slow price rises.

Yet if we do that it's likely to slow the economy down for a time, and it's the fact people believe we need growth that's stopped rates rising so far. Balancing the two is the start of the problem.

Of course there's a personal finance impact too. While variable rate mortgage holders gain from low interest rates, it's a nightmare for savers – especially elderly people living off the interest on their savings. As you can see it's not an easy job…

How high should interest rates be?

Results

2 - 2.75%667 votes (10 %)
3 - 3.75%434 votes (6 %)
7% or more531 votes (8 %)
0%362 votes (5 %)
0.25%281 votes (4 %)
0.5% (current rate)1,726 votes (25 %)
0.75%313 votes (5 %)
1.0%889 votes (13 %)
1.25%155 votes (2 %)
1.5%355 votes (5 %)
1.75%119 votes (2 %)
4 - 4.75%423 votes (6 %)
5 – 5.75%509 votes (7 %)
6 – 6.75%77 votes (1 %)

                   6,841 votes received.

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