Bank of England hikes interest rates to 0.75%

RBI raises key policy rate by 25 bps to 6.50%, holds stance at neutral

RBI raises key policy rate by 25 bps to 6.50%, holds stance at neutral

"Risk premia on GBP assets have increased somewhat in recent weeks".

'As a mutual which is owned by its members, it is our priority to deliver highly competitive and sustainable rates for both our savers and borrowers'. The UK economy is now in the tenth year of economic recovery and the unemployment rate is at its lowest level for over 40 years.

No. None of these fixed-rate deals will see an immediate rise.

The BoE's nine rate-setters were unexpectedly unanimous in their vote to raise rates to 0.75 from 0.50 percent, the level at which they have spent most of the past decade, apart from a period after the 2016 Brexit vote when they were cut even lower.

He said: 'Tracker mortgage customers who wish to get a bespoke idea of what a rate rise means for their individual circumstances should click on our interest rate change calculator.

"The proportion of respondents viewing the European Union and Brexit as one of the most important concerns facing the United Kingdom shot up from 46% to 58% in July, the highest reading in the history of the index which dates back to 1974".

While pay is finally starting to outpace price rises, wage growth remains modest by historical standards. "The GDP growth projection for 2018-19 is retained, as in the June statement, at 7.4 per cent, ranging 7.5-7.6 per cent in H1 and 7.3-7.4 per cent in H2, with risks evenly balanced; GDP growth for Q1:2019-20 is projected at 7.5 per cent", the MPC stated.

This has driven the prices of fuel - the biggest item on India's import bill - to record highs at a time the rupee is testing new life lows, raising the threat of imported inflation. SBI is offering an interest rate of 6.70% on fixed deposits with maturity between one year and less than two years, up from 6.65% it was offering earlier.

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When the Bank Rate goes up, so should rates on mortgages and savings accounts. One basis point is equivalent one-hundredth of a percentage.

"It doesn't bode well for the GBP that even a unanimous hike can not really get the momentum in Sterling going".

Dheeraj Singh, Head of Investments & Fund Manager - Fixed Income, Taurus Mutual Fund: "The decision to hike rates has, quite clearly, been driven by the persistent increase in headline and core inflation that we have witnessed in the last couple of months".

The BoE is due to announce its interest rate decision at 1100 GMT, and Carney will chair a news conference at 1130 GMT.

"We look for the BoE to keep rates on hold now until the Brexit outlook becomes clearer".

"It is also unlikely it will provide much benefit to savers, or any lasting boost to the pound, with currency markets much more concerned about further clarity in the Brexit negotiations". "The BoE has signalled in the past that a conventional horizon is typically two years not three". Markets are already expecting a rise, and from here on in, further hikes are going to be few and far between because United Kingdom economic growth is so fragile.

"We think markets are right to anticipate that the MPC will wait until May 2019 to raise Bank Rate again".

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