What effect will another interest rate rise have in the UK ?

Question

Rates were increased another 0.25% to a base rate of 5% today with economists speculating about more rises to come next year.

Answer 1

Interest rate increases in general are made to curve spending of the people. The increase in rates makes it more expensive to get a loan. What happens is people stop getting big loans to pay for large items like a house. Less money out in the open causes less inflation (less suply the greater the value). That's my two cents though its only a penny for my thoughts so the bigger question is where does the extra penny go?