The Bank of England raises rates in spite of the uncertainty of the Brexit

Good news for savers and retirees, british, bad for consumers, especially low-income families depending on the credit : the Bank of England (BoE) decided, Thursday, August 2, to meet the 0.25% rate to bring it to 0.75 %, its highest level since the financial crisis of 2008. This increase, moderate, and expected, but disputed, reflects both a relative optimism on the economic situation in spite of the uncertainty of the Brexit, and a willingness to contain inflation. It is nourished of the depreciation of the pound sterling recorded since the referendum on the divorce with the european Union (EU) of June 2016. For the past ten years, the rate had never risen, except to 0.25% in November 2017. In the Uk, 3.7 million borrowers repaying their variable rate loans. The surplus of 0.25 % renchérira the average of 4 % that is used today.

The british pound, after having reacted positively to the announcement of the BoE, and ended down on Thursday, as compared to the euro than to the dollar. The central bank’s decision comes in the wake of the release of the u.s. federal Reserve (Fed), which has left interest rates unchanged while inducing the likelihood of a future rise in the cost of credit due to the “strong” growth in the united states. London, like Washington, seem to want to convey to economic actors the progressive end of the cheap money.

The british economy, it sends signals much more contradictory. Unemployment (4.2 per cent) is the lowest since the 1970s and wages have started to increase again, even if it is low. But the inflation (2.4%), which exceeds the objective of the Bank of England (2 %). At the same time, the growth, after being maintained for a time after the referendum, is eroded in a context of uncertainty on the process of Brexit. The british economy (including the number…

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