Interest rate rise ‘could be the start of something’, says local finance boss
The Bank of England’s interest rate rise might not have an instant impact, but it could be the signal for future rate rises over coming months and years, according to one East Midlands financial expert.
The Bank of England reacted to mounting pressure to stabilise the economy today and implemented the first rise in interest rates for a decade.
The Monetary Policy Committee, the body responsible for setting the rate, agreed to a 0.25% increase – taking the overall rate to 0.5%.
Simon Browning, partner in charge of the Nottingham office of global accountancy group UHY Hacker Young, said: “I don’t believe this will have an instant major impact, as it puts us back to the same position we were in before the Brexit vote only 15 months ago.
“However, it could be the start of something – what lies ahead is more interesting and we could see some further rises.
“I think that’s when we will start to see individuals and businesses under more financial pressure amid further rate rises in an attempt to calm inflation.”
The decision, which had been forecast by many analysts, had been one of the most anticipated for many years. It is the first increase since July 2007.
The MPC, although split in recent months about whether or not to announce an increase, had hinted that an increase might be coming sometime during the next few months.
A growing need for stability in the economy appears to have finally forced their hand.
What the decision will mean for Chancellor Philip Hammond as he prepares for his autumn budget in a few weeks time remains to be seen.
