Bank of England Raise Interest Rates in 10 years

After more than a decade, the Bank of England decided to implement interest rate hike. The bank lifted its rate from 0.25% to 0.5%, as the first raise was recorded since July 2007. It is possible that the central bank will have two more increase in the next three years, according to Bank Governor Mark Carney. This action reversed the reduction in August 2016 that was made during the referendum vote to leave the EU.

There are nearly four million households that dealt with higher mortgage interest payments on the back of the rate hike but should provide decent returns to the savers. There are around 45 million savers in the country and for those who will consider purchasing an annuity for their retirement will obtain better agreements. While families who hold variable rate mortgage will be regarded as the main losers.

Moreover, the bank assessed that there are nearly two million mortgage holders that have not yet experienced interest rate hike since after the taking out the mortgage. There are seven out of nine officials who favored for higher interest rates.

The British pound declined by 1% versus the American dollar and the single European currency, while there are few investors hoping for further clues about the possible next raise. The GBP was reduced by more than a cent versus the mentioned major currencies to $1.3130 and €1.1280 accordingly.