The Bank of England, the UK’s central bank, has raised its main interest rate by 0.5% to 3.5%. This is the ninth in a series of increases over the past year that have had a ripple effect across the economy.
A central bank rate rise feeds into the rates that banks, businesses and people are charged to borrow, but it should also boost savings rates. These rates can – and are – being affected to different degrees, however. In central bank jargon, this is called the transmission of monetary policy varying across markets. For instance, while mortgage rates have rocketed in recent months, deposit rates for many savings accounts just haven’t kept up.
