Bank faces crunch interest rate vote this week
Bank of England ratesetters are expected to hold the Bank Rate this week, with economists agreed it is the likely outcome.
The Bank’s Monetary Policy Committee (MPC) announces its latest decision on Thursday with some members in favour of a rate rise.
Last month, the Bank held interest rates at 3.75% again, but three members of its nine-strong MPC voted for an increase.
Huw Pill, the Bank’s Chief Economist and an MPC member, supports a rise. “We cannot wait for uncertainties to resolve themselves before acting,” he said.
Rate hold
All 65 economists polled by Reuters this month said they expected the Bank to hold the rate this week.
Nearly 90% expect rates to remain on hold for the rest of the year, with eight predicting a rate rise to 4%.
Swap rates, which lenders use to determine the amount they charge for mortgages, have risen to a three-year high.
Uncertainty in the international bond markets is causing the volatility that is affecting the loans market.
Mortgages climb
All of this means mortgage rates have been climbing in the last 10 days.
Hopes of a mini recovery in the housing market appeared to have been dashed after the latest mortgage approval data showed a slump in the total.
Mortgages agreed decreased to 56,100 in July, down 2,100 from 58,200 the previous month, according to the Bank.
The post Bank faces crunch interest rate vote this week appeared first on The Negotiator.
Author: Gemma
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