Lessons from rising inflation and interest rates

As 2021 drew to a close, inflation finally forced the Bank of England’s hand with interest rates set to peak in April – but what does that mean for your savings, spending and insurance?

As 2021 drew to a close, inflation finally forced the Bank of England’s hand. What will higher rates mean for you?

Source: ONS.

The November inflation figures, released in mid-December, once again exceeded the Bank of England’s (BoE) expectations. At the start of November, the BoE had said that CPI inflation was “expected to peak at around 5% in April 2022”. Six weeks later it changed its tune: “Bank staff expect inflation to remain around 5% through the majority of the winter period, and to peak at around 6% in April 2022”.

What does that mean to you?

The value of your investment and any income from it can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.

Tax laws can change. The Financial Conduct Authority does not regulate tax or benefit advice.