Blue Sky boss responds to today's interest rate rise, the first in ten years

Gary Neild, Managing Director of Poole-based Blue Sky Financial Planning
Gary Neild, Managing Director of Poole-based Blue Sky Financial Planning

Gary Neild, Managing Director of Poole-based Blue Sky Financial Planning, said: “The rise in the bank base rate by 0.25% to 0.5% is a wise move that is needed to help counter inflation which is at a five-year high and outstripping wages.
“While in percentage terms the rate rise is significant, the ‘real’ impact will be slight. But it does send out a message that consumers and businesses should never be complacent about debt. Household debt is rising five times faster than earnings and at some point you need to encourage savers and discourage borrowers.
“Despite the move, any increases in interest rates moving forward are likely to be muted. The UK economy is vulnerable to any shocks and confidence is on a knife edge.
“The direction of monetary policy is clear but I don’t think we’ll see interest rates going back up to previous levels of 5% and above during the next ten years. Instead there will be a slow, gradual rise, possibly up to 1.5%.”

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