0:00
So, I've just come out of the Bank of
0:01
England where it was decided that
0:03
interest rates would be held at 4%.
0:06
That's bad news for your mortgages, but
0:08
it could be good news for savers. The
0:11
Bank of England made a decision based on
0:13
two competing factors, one of which was
0:15
not the upcoming budget. The bank
0:17
insisted that Rachel Reeves's potential
0:20
to raise taxes did not influence their
0:22
decision-m. First, four policy makers
0:25
who voted for an interest rate cut said
0:27
they were worried about a weakened jobs
0:30
market, falling vacancies, and rising
0:33
unemployment. This could push down on
0:36
demand in the UK economy, thereby
0:38
pushing down on price growth. Secondly,
0:41
the five policy makers who voted for
0:44
interest rates to be left on hold said
0:46
they were worried about high inflation
0:49
expectations. If more Britons go to the
0:52
shops and see prices rising at a higher
0:54
rate than 4% and think that price will
0:57
continue to be high, supermarkets and
1:00
other retailers and other stores might
1:02
turn and face and say we will keep
1:05
raising prices at that rate. So interest
1:08
rates were kept on hold to squeeze out
1:10
those inflationary pressures and
1:13
expectations in the UK economy. So,
1:16
should interest rates have been lowered
1:18
to lower your mortgages or did the Bank
1:20
of England make the right decision? Let
1:22
us know in the comments. And if you
1:24
would like to read more about the Bank
1:26
of England, head over to citym.com.
