HSBC and Virgin Money make product changes following base rate rise to 1.25%



HSBC and Virgin Money have both announced product changes following the Bank of England’s (BoE) decision yesterday to increase the base rate to 1.25%.

HSBC says its tracker rates will include the increased base rate from today (17 June). 

It notes that there will be no changes to its residential standard variable rate or buy-to-let standard variable rate.

The lender will publish an updated mortgage rate sheet to reflect changes. 

Virgin Money has also increased its tracker mortgage rates in line with the base rate rise. 

For existing customers whose mortgage rates are directly linked to the BoE base rate, their monthly payment will change on 1 August.

Santander also announced product changes for existing customers.

Santander increased rates on its tracker and standard variable rate (SVR) products, inluding the lender’s Alliance & Leicester tracker and SVR products.

Yesterday the Monetary Policy Committee (MPC) voted by a majority of 6-3 to increase the bank rate by 0.25 percentage points, to 1.25%. The members in the minority voted to increase the bank rate by 0.5 percentage points, to 1.5%.

The increase marked the fifth base rate rise since December 2021 after a decade of historic lows.

The MPC minutes said the committee expects inflation to be over 9% during the next few months and to rise to slightly above 11% in October. The increase in October reflects higher projected household energy prices following a prospective additional large increase in the Ofgem price cap.