‘Modest’ rise to base rate

The Gibraltar International Bank has said the Bank of England’s decision to hike the rate for the first time in a decade will not mark a significant difference for customers.

The base rate increased on Thursday to 0.5%, having been reduced to 0.25% last year in the wake of Brexit.

The Bank of England signalled more "gradual" increases are on the way to cool surging inflation, which it predicts will peak at around 3.2% this autumn.

Yesterday’s decision will impact all home owners on a variable rate mortgage and will add around £15 a month to the cost of the average mortgage.

However, the rate will offer some relief to savers previously hit by surging inflation and negligible returns.

GIB Treasury Manager Gerald Rodriguez told the Chronicle its clients will not notice a lot of difference in their mortgages or savings.

“This is new for young borrowers who have not seen an increase for 10 years, but the difference is not significant,” Mr Rodriguez said.

He described how someone on a £100,000 mortgage would likely be paying around £250 more a year.

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