Experts predict this may be the last hike for the foreseeable future
The Bank of England is expected to raise interest rates for the 15th time on Thursday, reaching their highest level since 2008. However, experts believe this may be the last hike for the near future.
Monetary Policy Committee likely to vote for an increase to 5.5%
Money markets indicate an 80% chance that the Bank's Monetary Policy Committee will vote in favor of lifting rates from 5.25% to 5.5% on Thursday. This raise will have an impact on both households and firms, making borrowing even more expensive.
Increase in mortgage rates
Mortgage rates have already seen an upward trend, with two-year rates currently at 6.66%, compared to 2.3% in 2021, according to Moneyfacts. However, traders believe that this upcoming rate hike will be the last, as previous forecasts had predicted further increases until the end of the year.
Mixed economic signals for the Bank
The Bank of England is currently facing the challenge of balancing mixed economic signals. Recent wage data has shown significant pay increases, while figures from last week revealed economic contraction in August. This suggests that the previous interest rate increases, from 0.1% in 2021 to 5.25%, are starting to impact the economy.
Predictions of high inflation, unemployment, and poor growth
Nouriel Roubini, also known as "Dr. Doom" for predicting the 2008 financial crash, warns that unless rates are lifted to 5.75%, the economy will suffer from high inflation, unemployment, and poor growth.
