HIKE IN INTEREST RATES
WE are told the Bank Of England wants to keep inflation in check, which obviously is good for us all, giving us more spending power.
But because inflation has dropped it has affected the pound, making it lower. Logic would tell us that lower inflation would help the pound. Apparently the markets are disappointed because lower inflation indicates that the Bank Of England may not increase interest rates in the near future. Why would they want increased interest rates alongside higher inflation?
This would be bad for consumers and home owners.
I know savers lose out, but the amount that interest rates would increase would be small, but significant for home owners, and inflation would possibly wipe out any gains.