LONDON: The British Bank is widely expected to raise Thursday’s interest rates to combat the increasing inflation, a step that tends to make mortgages and loans is more expensive.
Financial markets think the bank is more likely than not raising its main interest rates from a record low of 0.1% to 0.25% to control the increase in consumer prices from high energy costs, lack of labor and other factors as the global economy recovered from a pandemic .
If the Bank of England raises interest rates, it will become the first central bank among the leading seven economic groups to do so.
On Tuesday, the US Federal Reserve left interest rates unchanged because it announced it would begin to extend the stimulus program which was enforced during a pandemic to maintain inflation.
A number of policy makers in the arrangement of nine members of the Bank of England have voiced concerns about the increase in consumer prices, triggering expectations of a rise increase immediately.
The hope is that the initial interest rate increase will make the lid at the peak of inflation.
Even if the Bank of England does not increase interest rates on Thursday, there is hope that the Monetary Policy Committee for the Bank’s level regulation will show that he is ready to raise interest rates at the next meeting before Christmas.
Although the main measure of consumer price inflation was slightly dipped in September to 3.1%, it was still more than the percentage of points above the target of the Bank of England which was mandated 2%.
It is also expected to rise further in the coming months, with or without an increase in interest rates.
In the past, the level setting panel was sometimes detained from raising interest rates if assessing the price increase to be bound to a temporary phenomenon.
Some of the current inflation increases are due to a temporary factor, including comparing prices for those from a year ago when they slumped in the early months of pandemic.
However, there are signs that the increase in inflation becomes embedded in the UK economy through a higher wage increase.