Bank Of England Set To Hike Interest Rate

RTTNews | 707 days ago

(RTTNews) - The Bank of England is set to lift its key interest rate on Thursday after its major counterparts U.S. Federal Reserve and the European Central Bank lifted benchmark rates last week.

The August decision is likely to be a close call between a 25 basis-point and a 50 basis-point hike. The announcement is due at 7.00 am ET. The bank will also release its quarterly monetary policy report along with the policy decision.

The Monetary Policy Committee is set to decide on a split vote with seven members seeking a rate increase, while two others calling for no change.

As the inflation has slowed to a 15-month low of 7.9 percent in June amid stretched housing affordability, the BoE is more likely to opt for a 25 basis point hike today.

The BoE has lifted its benchmark rate over the last thirteen consecutive policy sessions, taking it to the current 5.00 percent, which was the highest since 2008.

Last week, the U.S. Federal Reserve had raised the target range for the federal funds rate by 25 basis points to the highest since early 2001. The next day the ECB also resorted to a similar rate hike.

The International Monetary Fund recently projected growth in the UK to ease sharply from 4.1 percent in 2022 to 0.4 percent in 2023. However, the 0.4 percent growth reflects an upward revision as the lender sees a stronger-than-expected consumption and investment amid falling energy prices.

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Bank Of England Set To Hike Interest Rate