Homeowners across the U.K. are hoping that the Bank of England will decide to avoid raising interest rates for the first time in nearly two years.
Thursday for the first time in nearly two years, a decision that would come on the heels of similar action by the U.S. Federal Reserve.in August to 6.7%, its lowest level since Russia invaded Ukraine, expectations have grown that the Bank of England will opt to keep its main interest rate unchanged at a 15-year high of 5.25%.
Before the inflation figures were released, most economists thought the central bank would raise its key borrowing rate once again by a quarter of a percentage point to 5.5%. That's because inflation is still way above the bank's target rate of 2% and higher than in any other Group of Seven major economy.
“Although interest rates will probably rise on Thursday, additional tightening unnecessarily risks aggravating the financial struggles facing households and businesses, given the longtime lag between rate hikes and their impact on the real economy," he said. For many homeowners, the pain has yet to hit. Unlike in the U.S., for example, most homeowners in Britain lock in mortgage rates for only a few years, so those whose deals expire soon know that they face much higher borrowing costs in light of the sharp rise in interest rates over the past couple of years.
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