Bank of England Base Rate rise and market updates for July 2018

The Bank of England Base Rate The Bank of England’s Monetary Policy Committee today raised interest rates for the first time since November 2017. The change is a small one, moving from 0.5% back up to 0.75%. Whilst today’s move is unlikely to have a significant impact on your finances, those on variable rate mortgages could see a small increase in their monthly payments. Payments will not change for those currently on fixed rate mortgages. Savers may benefit from a small increase in interest paid on their cash accounts, though rates offered through bank accounts remain feeble.  Market updates for July 2018 July saw the resignations of Boris Johnson and David Davis following the reported cabinet “agreement” on the UK's future relationship with the EU after Brexit as well as Donald Trump’s visit to the UK. Parliament is now two weeks into the summer recess. The FTSE 100 ended July at 7,748.76, which was 1.5% higher than the June closing figure of 7,636.93.  It is 9.8% higher than the March closing figure of 7,056,61 and 0.8% higher than the 2017 closing figure of 7,687.77. In the US, the Dow Jones Industrial Average’s performance was really strong and closed July at 25,415.19.  This was up 5.2% on the July opening figure of 24,161.53. In terms of £ Sterling, it ended July at 1.31 US Dollars.  This was 0.7% lower than the closing figure at the end of June of 1.32 US Dollars. Against the Euro, it was a similar story with £ Sterling ending July at 1.12 Euros, which was 0.7% lower than the June closing figure. Inflation, as measured by the Consumer Prices Index including owner occupiers’ housing costs (CPIH), was 2.3% in June 2018 (this is June’s data which is reported in July).  This was unchanged from the previous month. The Bank of England chose to keep interest rates unchanged in July but as mentioned, it was increased today.