Bank of England raises key rate to 0.75% in surprise unanimous vote

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Bank of England raises key rate to 0.75% in surprise unanimous vote

If interest rates are 1% or more by the time the economy sails into stormier seas, policymakers will at least be able to cut rates a couple of times before cranking up the printing presses for more QE. That was a fraction lower than a projection of rates of 1.2 percent the last time the BoE published forecasts for the economy in May.

Here, we have selected eight to answer. He said the rate hike came on the heels of a meeting with Union Housing and Urban Affairs Minister Hardeep Puri to discuss measures to put real estate sector "back on track".

The MPC baulked at a rate rise earlier this year after the economy dipped as a result of the extreme winter weather caused by the "beast from the east". "We would like to see EUR/GBP above 0.90 again, before considering a positive stance on GBP", says Larsen.

No easy access savings account at a major High Street bank pays interest of more than 0.5%.

Are you paying more that you have to on all your bills?

Savers, who have had the most to complain about in the low-interest rate environment, may see a modest gain.

Wages were likely to be growing by an annual 2.5 percent at the end of this year, a bit slower than forecast in May, before picking up to 3.25 percent in 2019, unchanged from before.

VK Sharma, Head Private Client Group & Capital Market Strategy, HDFC Securities: By hiking rates by another 0.25 percentage points the central bank is now fully ahead of the curve.

It also seems unlikely the United Kingdom will return to interest rates of 5% and above any time soon. For loans above Rs 30 lakhs women borrowers will be charged at 8.80% while other borrowers will be charged a rate of 8.85%.

"The average two-year fixed mortgage rate however was significantly higher back in February 2009, standing at 4.88%, compared with just 2.53% today".

EUR/GBP at 0.90 gives a GBP/EUR exchange rate of 1.11.

Why is the Bank raising rates?

Global crude oil prices have surged almost 20 percent this year and crossed $80 a barrel in May, their highest since 2014.

Max asks: I live in the euro area with a pension from the UK.

Mark Carney is Governor of the Bank of England.

The reason for this seems to be investors' reaction to Mr Carney's comments on the risks of a cliff-edge Brexit, and that rates would only rise slowly and gradually in the future.

Several economists have challenged the need for a rise now, given not only the Brexit risks but also the potential damper on global growth from U.S. President Donald Trump's import tariffs and counter-moves by other countries.

"According to Carney, the Bank's policy therefore needs to "walk - not run - to stand still".

Wraith doesn't believe that such data will stop the Bank of England from hiking rates but believes it should, particularly when considering that this behaviour is going against the bank's own forecasts. Developers had discussed lowering GST and setting up a "Stressed Assets Fund" to complete stalled projects by providing lastmile funding, he said adding that the government should take decisions to enhance buyer sentiment.

It said: "The rise threatens to dampen consumer and business confidence at an already fragile time".

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