✕CloseBank of England hike interest rates to 5 per cent
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Economists have warned that Britain was now on course for recession – predicting the bigger-than-expected rise by the Bank would hit the economy “like a giant wave”.
It comes as the Bank of England has risen interest rates to 5 per cent, defying hopes for a lesser increase in a further blow to homeowners struggling with catapulting mortgages.
Facing accusations from senior Tories that he has been “asleep at the wheel” over inflation, Bank governor Andrew Bailey lashed out company bosses – blaming them for fuelling inflation by offering pay rises.
Calling salary hikes “unsustainable”, Mr Bailey insisted: “We cannot continue to have the current level of wage increase” – before warning firms against “seeking to rebuild profit margins” by putting up prices.
The governor acknowledged that the mortgage payment pain ahead would be “hard” but that inflation is “still too high and we’ve got to deal with it … if we don’t raise rates now, it could be worse later.”
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Rishi Sunak admits inflation target now harder to hit as experts warn ‘giant wave’ recession likely
Rishi Sunak has admitted his promise to halve inflation by the end of the year has “become harder” to deliver, as the government comes huge pressure over Britain’s juddering economy.
The prime minister said he was still “confident” he could meet the target of halving inflation by the end of 2023, after the Bank of England was forced to hike interest rates 0.5 per cent to 5 per cent.
Economists warned that Britain was now on course for recession – predicting the bigger-than-expected rise by the Bank would hit the economy “like a giant wave”.
Facing accusations from senior Tories that he has been “asleep at the wheel” over inflation, Bank governor Andrew Bailey lashed out company bosses – blaming them for fuelling inflation by offering pay rises.
Calling salary hikes “unsustainable”, Mr Bailey insisted: “We cannot continue to have the current level of wage increase” – before warning firms against “seeking to rebuild profit margins” by putting up prices.
Rishi Sunak admits inflation target harder to hit
PM concedes pledge now ‘more challenging’ – as Bank of England governor defends 5% interest rate decision
Maryam Zakir-Hussain22 June 2023 15:281687496441
BlackRock announces fresh layoffs impacting less than 1% of staff, memo reveals
BlackRock has announced its decision to implement layoffs affecting less than 1 per cent of its global workforce, according to a memo obtained by Reuters.
The layoffs are a result of budget reallocations aimed at supporting critical priorities within the company.
With over 19,500 employees spanning across 30+ countries, BlackRock had previously reduced its workforce by 500 jobs earlier this year as part of an effort to streamline teams and cut costs in response to economic challenges such as higher interest rates, market volatility, and geopolitical tensions.
According to chief operating officer Rob Goldstein and global head of human resources Caroline Heller, the recent round of job cuts followed a comprehensive business review process.
The departments impacted were not known immediately, but the asset manager’s headcount will be higher at the end of 2023 than at the beginning of the year despite the job cuts, the memo said.
Shweta Sharma23 June 2023 06:001687493715
Jeremy Hunt to meet with lenders as mortgage crisis worsens with rates hike
Chancellor Jeremy Hunt will meet with banks to ask if they can do more to support the struggling households to address the deepening mortgage crisis and the impact of a shock interest rate hike.
Scheduled for this morning at Downing Street, the meeting will include major lenders such as HSBC and Santander.
With mounting pressure on the government to alleviate the situation, prime minister Rishi Sunak and chancellor Hunt have ruled out direct financial intervention, as the Bank of England aims to tackle persistently high inflation through the rate hike.
Labour Party has called for mandatory assistance from banks for distressed mortgage holders while some backbench Tories have demanded support for under pressure borrowers.
Mr Hunt’s approach is expected to focus on evaluating whether lenders are fulfilling their commitments to provide tailored support for those facing difficulties in making payments.
Shweta Sharma23 June 2023 05:151687485600
Voices: Andrew Bailey and Jeremy Hunt bet their future on a shock 0.5 point rate rise – it had better pay off
They must both hope this intervention will finally sort the inflation crisis, says James Moore.
Andrew Bailey and Jeremy Hunt bet their future on a shock 0.5 point rate rise
They must both hope this intervention will finally sort the inflation crisis, says James Moore
Martha Mchardy23 June 2023 03:001687471255
Why are interest rates going up – and what does it mean for mortgages?
An interest rate is a measure that tells you how high the cost of borrowing money is, or how high the rewards of saving are.
If you are borrowing money, typically from a bank, the interest rate on that money is the amount you will be charged for borrowing it.
It is a charge on top of the total amount of the loan and will be shown as a percentage of the overall.
Higher percentages mean paying more money to the lender for borrowing the money.
If you are saving money in a bank account, the interest rate on that money is the amount you will accrue on top of your savings. Banks will pay you a percentage of your total savings, typically at the end of the year.
How does this affect me and my mortgage?
Changes in the Bank of England’s base rate, which is the interest rate at which high street banks borrow from Threadneedle Street, has a knock-on effect on the interest rates that the former then set their mortgage borrowers.
The changes will also affect anyone with savings and anyone who is borrowing money from banks.
It will also have a wider effect on the economy. By raising the base interest rate, the BoE is hoping to temper soaring inflation and help with the cost of living crisis.
Martha Mchardy22 June 2023 23:001687462244
Voices: Who is really in charge of inflation – Rishi Sunak, or the Bank of England?
Since 1997, it has been the Bank of England’s job to set interest rates. Before then, the decision was taken by the chancellor of the exchequer, but over time the consensus grew that this was one of the causes of Britain’s chronic problem of inflation.
Why did politicians give up control of interest rates 26 years ago, asks John Rentoul.
Who is really in charge of inflation – Rishi Sunak, or the Bank of England?
Why did politicians give up control of interest rates 26 years ago, asks John Rentoul
Martha Mchardy22 June 2023 20:301687460404
Watch: Bank of England hike interest rates to 5 per cent
Bank of England hike interest rates to 5 per centMartha Mchardy22 June 2023 20:001687458710
Soaring interest rates ‘hard’ for cash-strapped Britons, admits PM
Prime minister Rishi Sunak has admitted soaring interest rates are “hard” for cash-strapped Britons, but vowed the Government will “remain steadfast” in the battle to curb inflation after the Bank of England delivered a shock hike to 5%.
The Bank unexpectedly pushed up interest rates by half a percentage point to the highest level in almost 15 years, with policymakers and the UK Government coming under mounting pressure to control the cost-of-living crisis.
The move is set to deepen the mortgage crisis as borrowing costs are hiked up for the 13th time in a row.
Speaking at the Times CEO summit in London, the prime minister said: “The reason interest rates are going up is because inflation is too high and we’ve got to bring it down.
“This is something that makes everybody poorer, that’s what inflation does.
“That’s why we’ve got to grip it, we’ve got to reduce it and interest rates are a part of that.
“Now, I always said this would be hard and clearly it’s got harder over the past few months but it’s important that we do do that.
“The Government is going to remain steadfast in its course and stick to its plan to do that.”
Martha Mchardy22 June 2023 19:311687456804
Watch: Sunak cracks jokes as he reacts to interest rates hitting 15-year high
Sunak cracks jokes as he reacts to interest rates hitting 15-year highMartha Mchardy22 June 2023 19:001687455004
Martin Lewis gives verdict on spiralling interest rates
Consumer champion Martin Lewis has given his verdict on the Bank of England’s decision to raise interest rates by 0.5 per cent, spelling further pain for mortgage holders.
The central bank’s base rate now sits at 5 per cent, after its monetary policy committee opted for its 13th consecutive hike since March 2020, as Bank officials seek to tame decades-high levels of inflation.
While markets had been bracing for a base rate rise of 0.25 per cent, fears of a more severe hike were heightened on Wednesday after official figures showed inflation had failed to fall – while, worryingly, core inflation – which excludes food and energy – hit a 31-year high.
Andy Gregory reports:
Martin Lewis gives verdict on Bank of England interest rate hike
‘One trick method causing huge pain’ to those with mortgages, Martin Lewis warns
Martha Mchardy22 June 2023 18:30
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