For first time in decade, UK interest rates are due to rise
London: The British economy is lagging its peers around the world this year, yet the Bank of England (BOE) is poised to deliver its first interest rate increase in a decade.
On Thursday, the central bank is expected to raise its main interest rate by a quarter percentage point from the record low of 0.25%. That would be its first hike since July 2007, just before global credit markets started to freeze up ahead of the following year’s full-blown global financial crisis.
The main motivation behind the anticipated increase is the fact that inflation is running above the bank’s target of 2% by a full percentage point. Inflation has spiked in the wake of the pound’s fall following last year’s vote to leave the European Union.