UK interest rates reach 2.25%; How this affects dentists
NewsPosted by: Dental Design 22nd September 2022
The Bank of England has today raised UK interest rates to 2.25%. It’s the seventh time in a row that the Bank has raised interest rates, in an attempt to tackle inflation. The half a percentage point increase from 1.75% to 2.25% takes borrowing costs to their highest levels since 2008 during the global financial crisis.
Whilst this will benefit people with long term savings accounts, it’s bad news for property owners with variable rate mortgages.
Financial planner Thomas Dickson, from Wealthwide, says: “For borrowers with variable rate mortgages, for every £250,000 of mortgage, you’ll be paying an extra £100 per month. Many dentists own several properties, both personal and business, so this latest increase is significant.
“In isolation, a slight mortgage increase would be manageable for most dentists, but against a backdrop of high inflation, energy price increases, practice profits being squeezed because of mounting dental equipment and supply costs, and increased cost of staff recruitment and retention, this latest interest rise is significant and creates a perfect storm.
“Now is the time for dentists to step back and look at their finances and, if they’re practice owners, the profitability of their business. Knowing and understanding your numbers – your assets, liabilities, income and outgoings – will be crucial to surviving this unpredictable financial climate. With a detailed and clear picture of where you are and a plan of action, you can either start to make changes or have the reassurance you don’t need to take any significant decisions in the short term.”
