FTA Vantage Point: Interest Rates  

BoE raises base rate to 0.5 per cent

“So those dividends by [share] buybacks are going to be there.”

Other actions can be taken to ease the impact of rate rises on personal finances, said Rachel Winter, associate investment director at Killik & Co.

"While rates are still relatively low, now is an excellent time to take advantage of fixed-term mortgages and loans.”

Edward Hutchings, head of rates at Aviva Investors, said: “As expected the Bank of England hiked interest rates to 0.50 per cent, however with four members of the committee voting for a 50-basis point increase, there is certainly a hawkish skew.

"Further, with the announcement to unwind the corporate bond purchases, this will turn up the heat and focus on the unwind of Gilt purchases when interest rates hit 1 per cent.

"This now may well be sooner than when than most investors had initially thought and we could well see gilt yields move further higher from here.”

sally.hickey@ft.com