UK Interest Rates Climb

Bank of England — UK Interest Rates Climb to 1.25%

Inflation in the UK has reportedly increased by 0.25%, the latest of five consecutive rises, bringing CPI inflation at a 40-year high.

We wrote recently on how inflation is supposedly climbing in Europe. Hosting Data regards this situation as really a supply chain problem, and a COVID hangover from the previous restrictions.

In what was an inevitable outcome from years of low productivity, the Bank of England has stepped in to attempt to curb the soaring costs of living. 

This comes as finances are increasingly throttled by a rising cost of living, for reasons linked above, with an anti-Russia stance that has also driven up fuel and energy costs to record levels not seen since the sixties.

Effects of Inflation on Day-to-Day Living

Inflation - which is the pace of price rises - has now reached a 40-year record-high of 9%, however the Bank of England says it could even go beyond 11% this year.

Let’s take a look at some of the ways inflation affects your daily living.

One scenario: You have to spend more and can’t save money as easily

In short, we can’t be sure what will rise and fall in cost. House and car prices may collapse. Because Hosting Data views this as a supply chain and productivity problem, chances are that commodities (food and energy) will see the biggest spikes in cost.

As the price of essentials goes up, this in turn negatively affects your monthly income. As the cost of food, healthcare, and housing increases, it’s very likely that prices of other goods go up too. This means that people will spend more on everyday items like food, clothing, and utilities.

One of the ways inflation affects your day-to-day living is by increasing the price of commodity goods and services. This is largely due to rising costs associated with the production of these goods.

Saver’s Market

The pandemic saw the world borrowing from the future, in a reaction to the pandemic. This pattern inevitably breaks to the reverse: saving. 

Indeed, one means of stemming rising costs - or inflation - is to boost interest rates. This raises the costs for borrowing and discourages spending in general. Higher interest rates can also propel more people to save.

Interest rates

The June climb will see homeowners who have a usual tracker mortgage having to pay around £25 more per month. This is less for those with a standard variable rate, which will have a £16 rise.

Let’s compare this with before 2022 - after the Bank of England introduced the first series of inflation increases - overall, those with tracker mortgages are paying about £115 extra monthly, and variable mortgage borrowers around £73 extra.

How Data Propaganda Relies on Emotions

Buyers and shoppers are more easily convinced to make decisions that marketers want when they are in an emotional state. Which is why it is important to remain aware even as panic sets in.

The best decisions are made in a state of opinionated awareness, and this is also true at the highest levels of athletic performance, from football players to jet fighters. 

Inflation is a cyclical economic phenomenon. It happens when the price of goods and services rises. While most people view this as a bad thing, it has actually helped many people out during this recession. It forces people to make tough choices, and they have to learn how to budget better and save more money. 

In fact, this is one of the best things that can happen to you when you experience inflation. Inflation is truly an insidious force. It sneaks up on you, and you might not even realise how much it's affecting your day-to-day living. 

Inflation affects your life in a variety of ways. You possibly have to spend more on food, healthcare, and housing and can’t save as easily as before. Your monthly income doesn’t grow at the same rate, and you pay more for commodity goods and services.


With the UK economy shrinking (the Bank says 0.3% between April and June), this is a saver’s market. Finding ways to capture those extra pennies is a boon. But avoiding being emotional is key to acting sensibly and having resilience.