UK interest rates set to rise amid high inflation
ABC News
The Bank of England is widely expected to raise interest rates in order to combat rising inflation, a move that is likely to make mortgages and loans more costly
LONDON -- The Bank of England is widely expected to raise interest rates Thursday in order to combat rising inflation, a move that is likely to make mortgages and loans more costly.
Financial markets think the bank is more likely than not to raise its main interest rate from the record low of 0.1% to 0.25% to rein in surging consumer prices stemming from high energy costs, labor shortages and other factors as the global economy recovers from the pandemic.
If the Bank of England does raise rates, it would be the first central bank among the Group of Seven leading economies to do so. On Tuesday, the U.S. Federal Reserve left interest rates unchanged as it announced it would start winding down the stimulus program it put in place during the pandemic to keep a lid on inflation.
A number of policymakers on the Bank of England's nine-member rate-setting panel have voiced concerns about the increase in consumer prices, stoking expectations of an imminent rate hike. The hope would be that an early rate rise would keep a lid on the peak in inflation.
