The Bank of England’s Monetary Policy Committee (MPC) has voted by XXXXX to increase the Bank Rate by 0.50 percentage points, to 1.75%.

This is the latest single rate rise by the central bank for 27 years.

The hike means interest rates are at their highest level since December 2008.

One member preferred to increase Bank Rate by 0.25 percentage points, to 1.5%.

Steve Seal, CEO, Bluestone Mortgages, said: “Today’s decision comes as a major shock to consumers and borrowers across the country – with it being the biggest interest rate rise in over 25 years. This will no doubt put further strain on people who have already been feeling the squeeze on their personal finances amid the cost of living crisis.

“While this rate rise will no doubt prompt many borrowers into action to lock in a fixed rate or remortgage, we must remember that rates still remain close to historic average and there is help at hand.

“Now more than ever, brokers have a critical role to play in demonstrating the range of options available in the current market conditions that can help people achieve their homeownership dreams. And, for those customers who are concerned about how this rate rise will impact their ability to meet their mortgage repayments, we encourage you to speak to your lender. The earlier you can engage, the more personalised the support you will receive.”

Paresh Raja, CEO of Market Financial Solutions, added: “At the start of the week, the Bank of England scrapped mortgage affordability tests. Coupled with today’s significant hike in interest rates, we have to expect some changes in the property lending space. The challenge is to ensure the dual economic factors of rising interest rates and inflation do not result in inertia in the lending space.

“Flexibility from lenders is going to become so, so important in the months to come. In the current climate, using rigid tick-box methodologies will fail to serve the needs of property buyers. Rather, lenders must demonstrate a little more creativity in how they assess loan applications; they must endeavour to tailor their products and services to the needs of the individual borrower; and ensure they take a view of the bigger picture as far as affordability checks are concerned. Due diligence and rigour will, of course, be vital, but there is still room to adapt process and keep lending.”