Published: Fri, August 03, 2018
Markets | By Otis Pena

What an interest rate rise means for you

What an interest rate rise means for you

The BoE's nine rate-setters were unexpectedly unanimous in their vote to raise rates to 0.75 from 0.50 percent, the level at which they have spent most of the past decade apart from 15 months after the Brexit vote when they were cut even lower.

In line with market expectations, the Reserve Bank of India (RBI) Wednesday increased its benchmark interest rate by 25 basis points on inflationary concerns. The reverse repo rate has been hiked to 6.25%, the RBI announced after its three-day Monetary Policy Committee (MPC) meeting.

The pound extended losses on Thursday after the Bank of England raised interest rates from crisis era lows but was cautious about any further tightening with an uncertain Brexit on the horizon.

National president of Confederation of Real Estate Developers Associations of India'(CREDA) Jaxay Shah, who was also part of the meeting, said, "Two consecutive hikes in the repo rate partially undo the policies for promoting affordable housing".

Charlotte said: "Today's rate decision is a beacon of hope for savers, who have grown exhausted of the low rates that have plagued them for so long".

Canary Wharf is home to some of the UK's banks, which will be deciding what to do with the rates on the mortgage and savings products in the coming days.

Among the Monetary Policy Committee panel members, Dr Chetan Ghate, Dr Pami Dua, Dr Michael Debabrata Patra, Dr Viral V Acharya and Dr Urjit R Patel voted in favour of the decision while Dr. Ravindra H Dholakia voted against the decision.

Tej Parikh, senior economist at the Institute of Directors, said:"The Bank has jumped the gun with the today's rate hike".

Yorkshire Building Society - A spokeswoman for the Yorkshire said: 'We will take time to consider how to adjust our variable rate mortgage and saving accounts.

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In anctipation of the crowds, Cottonwood Mall has added hours to its weekend schedule, staying open until 10 p.m. School computer supplies purchased by the consumer for personal use won't be taxed if items are under $250.

Urjit Patel, Governor: Well, numerous risks that we have cited, which informed our projections, are on both sides, and that is why we have said that these projections are against the backdrop of balanced risks.

"Fuelled by intense competition from newer banks, the fixed rate bond market has notably improved since the last base rate rise in November".

Cheaper mortgage deals in recent years have also encouraged people to lock in promotional rates.

Iain Lindsay, co-head of global portfolio management within the global fixed income team at Goldman Sachs Asset Management, said "today's rate hike is a significant, albeit not an unexpected move".

The forecasts see inflation slipping to 2.2 per cent in 2019 from an average of 2.3 per cent this year before settling at the goal in 2020.

Retailers fear rate rises as higher mortgage and other bills for consumers mean they will have less money to spend.

'Both the employment rate and number of vacancies are at record highs, and job-to-job flows are back around pre-crisis levels.

This is calculated using the March inflation rate, and changes in September.

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