From mortgage rates to savings – Bank of England governor Andrew Bailey answers your queries as interest rates reach 4%

THE Bank of England today raised interest rates for the tenth time in a row to 4 per cent.

The move will heap extra borrowing costs on Brits at a time when they’re facing soaring food and energy increases.

So why is Bank Governor Andrew Bailey making life harder for all of us?

Sun Business asks the questions readers want to know:

Q) Do you think the rate of price increases has peaked?

A) I hope so. There are definitely signs that we’ve turned a corner but as long as Russia continues this barbaric war, there’s always the possibility that energy prices could go up again.

Q) Why are you still increasing interest rates when inflation is already easing off?

A) We’ve all seen how difficult high inflation has been for millions of people. It looks like it’s beginning to turn the corner.

But it’s early days, and we have to make absolutely sure that ­inflation falls and stays low and that’s why we’ve raised rates again.

Q) Will this cause mortgage rates to rise again?

A) Variable or tracker rates will rise.

But for those taking out new fixed rate mortgages, those rates have fallen from the highs we’ve seen recently and I don’t expect our decision today to have much impact.

Q) Will this be the last rate rise?

A) It’s just too soon to say. It’s our job to get inflation back down to the 2 per cent target and for it to stay there.

We’ll make whatever decisions are needed to ensure that happens.

Q) Do you think you’re being too gloomy?

A) I try to be as realistic as possible and tell the truth. There is a lot of uncertainty around the economy right now.

There are some silver linings — inflation looks like it’s turning a corner. If inflation keeps falling, I promise to be more upbeat in the future!

Q) Last year you said we’d be in recession for two years, but now it’s only one — what’s changed?

A) Gas prices have fallen a lot over the past couple of months.

And fixed mortgage rates are a bit lower.

Unemployment hasn’t risen as we feared it might. That all puts a few more Pounds back in people’s pockets.

Q) You warned people off from asking for wage rises because of inflation but then gave your staff a pay rise.

Why should it be one rule for the Bank and another for the rest of us?

A) We’re giving our staff a 3.5 per cent pay rise targeted to those on lower salaries.

That’s a fair bit lower than the average at the moment and well below inflation.

I didn’t say no pay rises, but rises which try to beat inflation will mean high inflation lasts for even longer and ultimately hurt those on low incomes.

Q) Why do you think so many ­over-50s have stopped working and why should they come back to work?

A) We don’t know for sure. For some it’s early retirement. For others it’s related to long-term sickness.

Even though the economy is slowing, there are still a lot of job vacancies out there. Near record highs.

Q) Why aren’t savings rates rising as fast as interest rates?

Savings rates are going up. Do shop around for the best rates and vote with your feet if you feel you aren’t getting the best deal.

BOSS OF H’ROW TO QUIT ROLE

THE boss of Heathrow is stepping down months after being accused of creating “airmageddon” during a summer of cancelled flights.

John Holland-Kaye, who has led Europe’s busiest airport for nine years, was involved in a row with airlines after introducing a cap on passenger numbers during the peak holiday season.

The cap, which led to thousands of flight cancellations, lost baggage and long delays, came in as there was not enough workers to handle the rush of holidaymakers.

Emirates accused Heathrow of “incompetence and non-action” and called for Mr Holland-Kaye’s resignation.

British Airways owner IAG warned a repeat this summer would not be tolerated.

Mr Holland-Kaye helped get parliamentary approval to build a third runway at Heathrow but it still has to resubmit its plans and there are doubts about whether it will ever happen.

SAUSAGE SIZZLERS

SAUSAGE maker Cranswick has cheered strong sales over Christmas as shoppers gorged on festive porky treats.

The firm, which supplies pork and poultry to the UK’s biggest supermarkets, said trading was “particulary robust”.

Cranswick, which is investing in more British pigs, also said it had passed on higher product prices to customers.

Shares in the firm rose by five per cent, valuing the business at £1.77billion.

DUNK SLAMMED

SUPERDRY founder Julian Dunkerton has been forced by the Takeover Panel to confirm that he will not launch a bid for the company.

The regulator told the Cheltenham-based entrepreneur that he had to clear up speculation about taking the business private and he is now banned from making a bid for the next six months.

Mr Dunkerton, who still owns a 24 per cent stake, said he had “no plans to do this at the moment”.

Superdry shares rose five per cent after his statement.

14% HIKE BY BT

BT is hiking prices by 14.4 per cent next month — about £1 extra a week for its phone service — but still claims it’s “exceptionally good value”.

Boss Philip Jansen said the higher-than-inflation rise reflected soaring energy costs.

He said “extremely strong” demand had seen a record 155,000 customers connected to its ultra-fast Openreach broadband in three months.

BT, which made a £2billion profit in 2022’s last quarter, is battling Virgin Media O2, Liberty Global and infrastructure funds to lay fibre.