14th straight interest rate hike expected by Bank of England
The Bank of England is expected to raise interest rates for the 14th time in a row, increasing from 5 per cent to 5.25 per cent on Thursday economist predict, as it faces the continued job of controlling stubbornly high price rises.
The last time interest rates stood at 5.25 per cent was 15 years ago in April 2008, highlighting the unusually high rate, and it will mean higher rates on mortgages and loans as well as higher savings rates as households are put under further pressure.
The expected 0.25 per cent rise presents a smaller increase than in July, as rates dramatically rose from 4.5 per cent to 5 per cent, and inflation fell much more than expected in June, offering signs that price rises have begun to ease.
The Bank of England hopes that people will spend less money by making borrowing more expensive which should lead to prices rises easing, however, rising rates too aggressively could cause the economy to slump meaning it is a tight balancing act for the experts.
Earlier this week, Prime Minister Rishi Sunak told LBC radio that inflation was not falling as fast as he would like, but that he believed people could "see light at the end of the tunnel".
Dr Yi Ding, Assistant Professor of Information Systems at the Gillmore Centre for Financial Technology, commented: “As interest rates continue to rise, innovation must remain a priority as the UK continues to strive for Tech Superpower status, hoping to retain its position as a global FinTech hub. The rising rates will undoubtably cause increased concerns for businesses which means support must be shown towards our innovation drivers, which includes investment and funding, to allow emerging technologies to develop at the speed needed. We must come together collectively, offering a collaborative approach from government, regulators, industry and academia to ensure this is top of the agenda for the UK to remain the go to destination for FinTech development.”
