UK: Due to ongoing sanctions against Russia, mortgage holders in the United Kingdom have seen the biggest increase in interest rates since 1995. The Bank of England raised the base lending rate from 1.25 to 1.75 per cent.
This comes as the central bank revised its inflation forecast for 2022 from 10.25 per cent to 13 per cent, predicting that the UK economy will enter recession in the fourth quarter. The think tank, the Resolution Foundation, cautioned that inflation could reach 15% by the beginning of 2023.
Attorney General Suella Braverman told Sky News on Thursday morning that the Bank of England has raised the base loan rate "very slowly".
"Interest rates should have been raised a long time ago"
— Sky News (@SkyNews) August 4, 2022
Suella Braverman MP says she would 'welcome' a rise in interest rates.
She adds that the Bank of England has been 'too slow'.
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The frontrunner for the Conservative nomination for prime minister, Liz Truss, whose campaign she is backing, will "review the mandate of the Bank of England" if she succeeds Boris Johnson.
“She is very interested in seeing how the Bank of England operates, apparently maintaining its independence,” Braverman said. “The fight against global inflation is the challenge we are currently facing. The Bank of England's lever in this struggle is the increase in interest rates."
In 1997, former Chancellor of the Labor Party Treasury Gordon Brown gave the Bank of England the authority to set interest rates instead of an elected government.
Braverman argued that the tax cuts promised by the truss would be necessary "so that families and businesses could overcome the challenges" despite the fact that they would increase inflation.
Tim Bannister, a housing expert at real estate website Rightmove, cautioned that the increase could drive first-time buyers out of the market.
According to him, first-time buyers are now faced with an average asking price that is at a record high of around £225,000, making the cost of a 10% deposit 57 percent higher than a decade ago, while the average income has only increased. 31 has increased. ,
The proposed 0.5 percent increase, according to Bannister, would raise the average monthly mortgage payment to 40% of household income, the highest level since 2012.
But despite the financial stress of the market, demand for ready-made homes for first-time buyers increased by 35%, in what Bannister described as the last "normal" market of the year, "despite shifting from first-time buyers." Shows a high motivation for "challenges," he said.
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