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Graham Lamont

Interest rate rise was right move say Cumbrian accountants

Published on: Thursday 2nd August 2018

The interest rate hike announced by the Bank of England has been hailed as the right move by a leading county accountant.

Graham Lamont, chief executive of Lamont Pridmore, said the Bank had to strike a delicate balance between earnings and inflation.

He added the raising of the base rate from 0.5 per cent to 0.75 per cent was enough to make a difference.

He added: "If they had raised it to one per cent, it would have been a step too far. It would have worried consumers and industry, plus there's Brexit in the background too.

"This rise will see mortgages rise no average about £25 a month. The trigger point is £50 as that's when it makes an impact on consumer spending, which in turn knocks business confidence."

It is the highest level interest rates have risen to for nearly 10 years.

The nine members of the Bank of England's Monetary Policy Committee voted unanimously to raise the base rate.

Mr Lamont added that older people and those on fixed incomes should be better off with with raise as it meant the interest they receive on their savings and investments would rise.

Paul Dickson, chief executive of Armstrong Watson, agreed.

He said: "The increase was expected and justified.

"With Brexit, threat to a weakening currency will drive inflation as sterling weakens, so increase in interest rates is what you would expect.

"Additionally the UK economy is trundling along compared to the global stage and is sluggish, so again expected action taken to increase interest rates.

"At 0.75 per cent, we probably have interest rates at the right level. In the short term will have positive impact on savers.

"There won't be a big impact immediately on mortgages as many will be fixed but we will see a moderate increase in the cost of borrowing."

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