The Bank of England (BoE) has confirmed that interest rates will rise by 0.75%, from 2.25% to 3% and is the biggest hike in 14 years (1989).

“Today’s anticipated decision by the Bank of England to raise their interest rates by 0.75%, to 3%, is likely to have implications on consumers spending habits, but automotive retailers should not be too concerned as rates are still historically low,” said Sue Robinson, Chief Executive of the National Franchised Dealers Association (NFDA) which represents car and commercial retailers across the UK.

Robinson continued: “Raising interest rates will have an effect on people’s savings and mortgage accounts, and will also have implications for things such as bank loans and car loans.

“NFDA understands how crucial it is for the Bank of England and the Government to make every decision necessary to stabilise the current economy, but by raising interest rates it will make it harder for consumers to fund essential purchases such as cars required for mobility including commuting to work.

“However, cars are still a necessity to many and whilst the current new car market is facing well-documented supply side constraints, figures reveal that consumer demand remains buoyant, and NFDA believes this will continue through the latest rise in interest rates.”