The latest increase in interest rates by the Bank of England is "absolute lunacy", Mather and Murray Financial independent financial adviser, Samuel Mather-Holgate has stated.
The BoE announced that interest rates have been raised by 0.25 percentage points to 5.25 per cent today (August 3).
But Mather-Holgate criticised the decision on the back of a fall in inflation and a lack of time for the last rises to be fully felt.
"This further rise will add misery to homeowners and those with business finance," he additionally stated, "an already lifeless housing market will shrink further into itself, not to reappear until spring".
Mather-Holgate also stated that the governor needs to "get a grip" and reverse these hikes before the end of the year.
"Thankfully, the next inflation print might just give him the impetus to pause and reflect on his insane mission to bash borrowers," he concluded.
This sentiment was shared by others in the industry, such as Lodestone Mortgages & Protection director, Craig Fish, who stated: "This latest increase was pointless and ill-thought-out."
Fish argued that the Monetary Policy Council is using the same tool that "hasn’t worked the last 13 times they used it and won’t have any effect this time either".
He detailed that, while the announcement may have an effect on those with tracker mortgages, it won’t have an impact on fixed rates as the increase is "already factored into current offerings".
However, some saw the announcement as positive news, such as We Are Money founding adviser, Jonathan Burridge who stated that the MPC acted "as predicted" and that predictability is "essential" for a calm market.
"A calm market means swap rates settle and that will mean a drop in fixed rate pricing as we are already starting to see," he added.
This positive sentiment was echoed by Magni Finance director, Ashley Thomas, who said: "This is as expected and a sensible move as the priority is to get inflation down.
"If we get another positive reduction in inflation with the next announcement mid-month, we can be hopeful that we are close to the peak of the base rate."
A different perspective was offered by Lawson Financial Ltd director and mortgage and protection adviser, Michelle Lawson, who said that the news "is no longer a shock any more" and that interest rates are starting become a "no-news" item for most people.
Looking to the future, Coreco managing director, Andrew Montlake, said: "The next inflation report and subsequent words and actions from the Bank of England are crucial to us all.
"We know taming inflation is imperative, but to every action there is a reaction further down the line."
tom.dunstan@ft.com
What's your view?
Have your say in the comments section below or email us: ftadviser.newsdesk@ft.com
