{"id":57497,"date":"2017-11-01T22:15:30","date_gmt":"2017-11-02T02:15:30","guid":{"rendered":"http:\/\/www.gayfriendschat.com\/socialblog\/bank-of-england-interest-rate-decision-today-could-see-first-rise-in-10-years-heres-what-to-watch-for\/"},"modified":"2017-11-01T22:15:30","modified_gmt":"2017-11-02T02:15:30","slug":"bank-of-england-interest-rate-decision-today-could-see-first-rise-in-10-years-heres-what-to-watch-for","status":"publish","type":"post","link":"https:\/\/www.gayfriendschat.com\/socialblog\/bank-of-england-interest-rate-decision-today-could-see-first-rise-in-10-years-heres-what-to-watch-for\/","title":{"rendered":"Bank Of England Interest Rate Decision Today Could See First Rise In 10 Years, Here’s What To Watch For"},"content":{"rendered":"

Bank Of England Interest Rate Decision Today Could See First Rise In 10 Years, Here’s What To Watch For<\/b>
\nThe Bank of England will decide later today whether to raise interest rates for the first time in a decade.<\/p>\n

The decision on the base rate, which affects thousands of mortgages and savings accounts, comes over 10 years after rates last went up in July 2007.<\/p>\n

Back then, they rose to 5.75% but today the rate stands at 0.25%, and market analysts have told HuffPost UK they expect a decision to boost rates by up to 0.5%, ending the historic low.<\/p>\n

An increase would signal improved confidence in the economy. However, a shock decision to hold the rate could prompt turmoil.<\/p>\n

Bank governor Mark Carney hinted at an increase in the summer, setting expectations ahead of Thursday\u2019s decision.<\/p>\n

Here are four things to watch out for as the decision is made:<\/p>\n

1. Whether or not the rates rise<\/p>\n

The Bank\u2019s Monetary Policy Committee (MPC) sets interest rates in an effort to meet an inflation target of around 2%, well above the five year high of 3% in consumer inflation reached in September.<\/p>\n

The MPC has nine members and meets eight times a year, and most recently voted in August to keep rates at a record-low of 0.25%.<\/p>\n

But its decision this time around is expected to recommend a modest increase of between 0.25% and 0.5%.<\/p>\n

That outcome has been factored into the value of Pounds Sterling and the broader market.<\/p>\n

\u201cThe key thing will be whether or not they do move rates,\u201d\u00a0Robert Garder, Nationwide\u2019s chief economist, told HuffPost. \u201cWe do think they are likely to raise rates tomorrow but don\u2019t expect a massive impact on the economy.\u201d<\/p>\n

If rates rise This will conform to the market\u2019s expectations and crucially be a sign that the UK economy is recovering or at least is predicted to no longer need continued stimulus via record-low rates. If rates stay the same This will be a shock to the market, and potentially signal a lack of stability in the UK economy. The value of Sterling will likely fall as the impact of an increase has already been priced in by the market.
\n2.\u00a0How much rates rise (if they do)<\/p>\n

\u201cThe raise if it happens is likely to be fairly small so any effect is modest,\u201d Gardner said. \u201cThe proportion of home owners on variable mortgages is at a record low.\u201d<\/p>\n

The number on those types of mortgages has fallen to a record low of c40%, down from a peak of c70% in 2001. It means most home owners are on \u201cfixed rate\u201d deals, protected in the short-term from changes in the base rate.<\/p>\n

Jeremy Spain, fund manager at Charles Stanley, told HuffPost he expects a decision in favour of a rate rise, with an the increase of around 0.25%.<\/p>\n

\u201cAn increase on that scale would be nothing in the grand scheme of things, and even for those who haven\u2019t experienced a rise before, they will probably be on a fixed rate, and so the effect will be minimal,\u201d he said.<\/p>\n

3. Whether more increases are likely<\/p>\n

The MPC will announce its decision in a statement and analysts will quickly pour over its words, looking for signals around future moves on rates.<\/p>\n

\u201cWe\u2019d expect the committee\u2019s language to be moderate and for them to indicate the next rise won\u2019t come until the end of 2018 or even early 2019,\u201d Spain said.<\/p>\n

Other analysts point towards pressures on the economy, such as stagnant wage growth, even shrinking real pay packets, and restrained purchasing power as tempering the Bank\u2019s position.<\/p>\n

\u201cWe expect the interest rate hike tomorrow is likely to be a one-off event,\u201d IHS Markit\u2019s Raj Badiani told HuffPost. \u201cBut [we] accept it will be a close call<\/a> if one more follows in early 2018.\u201d<\/p>\n

\u201cThe central bank will wait to see how the economy responds after the interest rate hike tomorrow, while facing strong criticism for not tolerating the inflation overshoot given the economy is facing some extraordinary circumstances,\u201d he added.<\/p>\n

4. What banks do with the new rate<\/p>\n

The aftermath of any decision will take longer to assess, especially if it is a modest rise.<\/p>\n

There are no hard and fast rules as to how banks handle increases in base rates, although some have already said how they will respond.<\/p>\n

Nationwide, the building society, confirmed it will pass on any increase to its millions of savings account holders.<\/p>\n

\u201cWe have said we would move any increase to our savers,\u201d Gardner said. \u201cBut it will be interesting to see how the industry as a whole handles any change.\u201d<\/p>\n

The Bank\u2019s decision comes after the purchasing managers\u2019 index for manufacturing beat economists\u2019 forecasts\u00a0on Wednesday, amid a boost in domestic factory orders.
\n
\nwww.huffingtonpost.co.uk\/entry\/bank-of-england-interest-rate-decision-today-could-be-first-rise-in-10-years_uk_59f9df2ce4b046017fb0510d<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Bank Of England Interest Rate Decision Today Could See First Rise In 10 Years, Here’s What To Watch For The Bank of England will decide later today whether to raise interest rates for the first time in a decade. The decision on the base rate, which affects thousands of mortgages and savings accounts, comes over … Continue reading Bank Of England Interest Rate Decision Today Could See First Rise In 10 Years, Here’s What To Watch For<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":2466,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[107],"tags":[],"class_list":["post-57497","post","type-post","status-publish","format-standard","hentry","category-news"],"yoast_head":"\nBank Of England Interest Rate Decision Today Could See First Rise In 10 Years, Here's What To Watch For - GAYFRIENDSCHAT.com<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.gayfriendschat.com\/socialblog\/bank-of-england-interest-rate-decision-today-could-see-first-rise-in-10-years-heres-what-to-watch-for\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Bank Of England Interest Rate Decision Today Could See First Rise In 10 Years, Here's What To Watch For - GAYFRIENDSCHAT.com\" \/>\n<meta property=\"og:description\" content=\"Bank Of England Interest Rate Decision Today Could See First Rise In 10 Years, Here’s What To Watch For The Bank of England will decide later today whether to raise interest rates for the first time in a decade. 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