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The Guardian - UK
The Guardian - UK
Business
Larry Elliott Economics editor

IMF warns BoE over keeping UK interest rates high due to fixed-rate mortgages

Spring flowers bloom in front of the Bank of England building
The Bank of England raised interest rates 14 times between December 2021 and August 2023 but has since left borrowing costs unchanged. Photograph: Toby Melville/Reuters

The high proportion of UK homeowners on fixed-rate mortgages means the Bank of England should be wary of keeping interest rates too high for too long, the International Monetary Fund has warned.

The IMF said many borrowers had been sheltered until now from the impact of higher interest rates and there was a risk of declining consumption, house price falls and increasing defaults as tighter policy finally had an impact.

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