Economy

For first time in decade, United Kingdom interest rates are due to rise

For first time in decade, United Kingdom interest rates are due to rise”

This was the lowest since June but above the expected level of 66,000.

Bank rate was cut to from 0.5% to 0.25% in August a year ago as policymakers judged the United Kingdom needed additional stimulus to prevent a possible stalling of the economy after the shock Leave win in the European Union referendum. Still, it would need to be confident wages can rise further in the coming months.

The move comes as many lenders are increasing rates in anticipation of a rise in the Bank of England Base Rate later this week.

However, a quarter-point rise is likely to have a relatively small impact on the double-digit interest rates charged on cards and other debts.

Ahead of the data, the pound rose against its major rivals.

The Bank has since signalled it is now minded to tackle rising inflation by bringing interest rates back to 0.5%.

The Bank's preparations come as business investment flatlines, with companies reluctant to spend because of fears over a hard Brexit. Raising interest rates would remove support for firms from cheap loans, potentially compounding the problem.

Mortgage approvals for house purchase fell in September, taking lending below the previous six-month average, Bank of England figures show.

Woods and his fellow BoE deputy governor, Jon Cunliffe, are due to speak to a British parliament committee on Wednesday about the effect of Brexit on financial services.

Failure to act on Thursday could also pose fresh risks. What would a rise in interest rates mean for you?

Philip Rush, founder of the consultancy Heteronomics, said: "A dovish disappointment would weaken the currency and reintroduce inflationary pressures that previously appeared to be intolerably excessive".



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