News1 min ago
Boe Raises Interest Rates
6 Answers
Rates up slightly, apparently to combat inflation. But from what I can see inflation is due to unforeseen international circumstances so how will putting up interest rates help in this scenario?
Will savers rates rise I wonder? Bet borrowers went up immediately.
https:/
Will savers rates rise I wonder? Bet borrowers went up immediately.
https:/
Answers
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//So how will putting up interest rates help in this scenario?//
yes its mainly due to factors outside UK but theres also wages pressure and demand as peopel have money saved up over last few years such as saved travel costs.
For starters....Borrowing to spend is more expensive so is likely to fall so the demand for cars, home furniture, TVs; jewelry, meals out, falls.
Peoples mortage goes up so they have less to spend.
These will put downward pressure on inflation.
Also if savings go up people might save a bit more (yes only a miserly increase and probably not for a while) and so demand falls so pressure on prices fall.
Its all abit crude/blunt instrument but its all BoE has available and as allways been used
yes its mainly due to factors outside UK but theres also wages pressure and demand as peopel have money saved up over last few years such as saved travel costs.
For starters....Borrowing to spend is more expensive so is likely to fall so the demand for cars, home furniture, TVs; jewelry, meals out, falls.
Peoples mortage goes up so they have less to spend.
These will put downward pressure on inflation.
Also if savings go up people might save a bit more (yes only a miserly increase and probably not for a while) and so demand falls so pressure on prices fall.
Its all abit crude/blunt instrument but its all BoE has available and as allways been used
As Bob indicates, the principle is that pushing up interest rates forces consumers to tighten their belts, thus reducing demand for many products. That, in turn, restricts the ability of manufacturers and retailers to raise their prices.
It seems very unlikely that the rise in the Bank of England interest rate will be the last one for a while. The US Federal Reserve increased their interest rate this week too and indicated that they're planning on SIX FURTHER rate increases this year.
https:/
The Bank of England is likely to follow a roughly similar course of action with regard to interest rates.
It seems very unlikely that the rise in the Bank of England interest rate will be the last one for a while. The US Federal Reserve increased their interest rate this week too and indicated that they're planning on SIX FURTHER rate increases this year.
https:/
The Bank of England is likely to follow a roughly similar course of action with regard to interest rates.
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