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The Bank of England is expected to raise interest rates by a quarter point to 4.75 percent on Thursday, with growing calls for tougher measures to combat persistent high inflation. Headline inflation remained at 8.7 percent in May, according to worse-than-expected data on Wednesday, and core inflation, which excludes volatile food and energy prices, rose to 7.1 percent, the level highest since 1992. Some economists said inflation figures had been so bad that the BoE could surprise with a 0.5 percentage point increase in its midday announcement or signal a big move at the next Monetary Policy Committee meeting in August. Allan Monks, UK economist at JPMorgan, said the two inflation figures since the last BoE meeting left him “feel[ing] strongly that the MPC must act strongly by rising 0.5 percentage points this week. But he said the MPC would probably stick with a smaller increase, “simply on the basis that the BoE has given no sign of a step forward, nor any forward guidance on the issue.
Financial markets expecting interest rates to hit 6 per cent by the end of the year, raising the cost of mortgage repayments, ministers are bracing for a backlash among core Conservative voters ahead of the election. of the Russia Mobile Number List next year. Prime Minister Rishi Sunak will say on Thursday that he feels "a deep moral responsibility" to tackle inflation, arguing that any delay in addressing the problem will make things worse. “That's why our number one priority is to cut inflation in half this year and get back to the 2 percent goal,” he will say. “And I am completely sure that if we keep our nerve, we can do it.” Recommended Almost half of all mortgage holders said they had found it difficult to pay bills and service their debts in recent months, according to a survey by debt relief charity StepChange, carried out before the latest concerns on mortgage rates.
Responding to growing mortgage misery for families coming to the end of fixed rate deals, the Labor Party on Wednesday night called on the government to require lenders to help struggling borrowers. This support could come, for example, by lengthening the term of a mortgage or allowing them to switch to interest-only payments for a temporary period. The Conservatives argue that banks are already required to engage with customers struggling to repay their home loans under a regime overseen by the Financial Conduct Authority. After Wednesday's figures, the prime minister's January promise to halve inflation has become harder to deliver. Successfully reducing inflation to 5.8 percent in the fourth quarter would require reducing the monthly rate from 0.7 percent in May to 0.3 percent over the next six months. Virgin Money, TSB and NatWest were among mortgage lenders to announce higher interest rates on fixed rate deals on Wednesday. Average rates on two-year fixes hit.
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發表於 2024-3-12 15:54:18