The Bank of England has just raised interest rates to 0.5%.
Good news for Monzo commercially, but I wonder if they might consider raising rates for Plus and Premium account holders?
Any thoughts about what this might mean more broadly in the retail market?
I might be a pessimist here but I don’t think it will dent inflation this time, which I feel like the BOE have somewhat lost control of.
It will dent house prices I guess. And we’ll get a small rise in general savings rates. I really hope Monzo pass this on, otherwise their premium model is only .5% above base rates, which feels dismal.
Can banks use an interest rate increase to offset any additional costs to the business rather than pass them on?
Yes sure, it’s a competitive market, they can offer whatever rate they want to consumers.
The standard Monzo current account now offers 0.5% less than the base rate for example.
I was curious whether some wouldn’t pass it on to cover the increased costs elsewhere!
Some will certainly, but they’ll have to balance that against the providers who offer the higher rate and the potential exodus of money to those. I reckon we’ll see a good selection of savings accounts with higher rates now 
now if the BoE can hold off a further rise till after March, I will lock my mortgage in for 5 years and worry about it later
I’ve another 4 years left on mine thankfully, also overpaying every month. So when those 5 years are up, if the 
hits the fan, I don’t owe as much and will have more options 
Higher rates will take a hot lance through house prices. Seems we are in for more rises, too, as (a) inflation is very high, and (b) the split on votes was 4/5 with the 4 in the minority trying to raise rates even higher this month.
A number of banks have suggested that they would use the first few interest rate rises to improve their margins.
These are lower than normal, given how far interest rates fell and they don’t need the extra customer deposits atm.
Atom passed on the last rate increase to savings customers, it feels like the pressure on banks is on from the smaller players. It will squeeze margins but at the benefit of customers.
(Not the high street ones as they are pretty much never competitive on savings)
I’m interested to see if Tesco Bank up their’s again as that would take my rate over 1% 
When you can remember Egg paying 8% you don’t get particularly excited faffing over whether or not you’re going to get 0.5%.
Oh I don’t get excited over them at all, but I know others do.
Managed to switch this evening at 1.64% for 5 years, so got a sorted till 2027
I remember First Direct paying 10% on their Regular Saver many years ago.
I used to borrow from Egg at 0% to save at 8% or more (I’m sure I remember 10%) with them. Transfer from a 0% card and withdraw from savings to make the minimum payment each month - in the days when you could do that kind of thing.
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