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  1. ITV Report

How the interest rate rise affects borrowers, savers and business owners

  • Video report by ITV News Consumer Editor Chris Choi

Many cities are like Swansea, with fragile economic growth, and a mixture of borrowers, savers and businesses that will all be affected differently by the interest rate rise.

The Gevaux-Ross family face an extra £120 a year on their mortgage payments. Credit: ITV News
  • The borrower

The Gevaux-Ross family, like around 3.7 million households, have a variable mortgage rate and face extra rate payments of about £120 a year with the hike in interest.

"It’s not the only thing that is going up in price,everything else is going up in price. It is just another thing added on that is going to cost us more money," said Daniel Gevaux Ross.

While variable mortgage holders face an average of up to£144 for every £100,000 borrowed, savers will get an average of just £3.90 for every £1,000 savings deposited, increasing to £6.40 if the rate rise is passed on.

Rebecca Dix said that an interest rate rise can help her save towards a deposit. Credit: ITV News
  • The saver

Rebecca Dix is saving for her first home, but earning as little as 0.5% on her ISA.

She said the interest rate rise has been "a long time coming".

"Any increase is going to help me at the moment as a saver," she said. "Not so much maybe once I’ve bought my house."

Richard Morgan of Morgan Marine fears the 'rate ripple effect'. Credit: ITV News
  • The business

Morgan Marine manufactures industrial housing employing 400 people.

Technical Director, Richard Morgan fears the rate ripple effect will squeeze spending on products.

"In the short term, with the slowing down of the economy, I think it could affect us and our order book," he said. "Long term, it will strengthen the pound which will benefit us as we import a lot of goods from overseas.

Some borrowers, savers and business owners may have seen interest rates rise before - especially in the 1980s when rates hit 15%.

But for others, this interest rate rise will be a new challenge.