Policymaker warns households must prepare for interest rate hike sooner than expected as Bank of England tries to keep inflation under control
Households must prepare for an interest rate hike sooner than expected as the Bank of England tries to bring inflation under control, a key politician has warned.
Michael Saunders, who sits on the Bank’s Monetary Policy Committee (MPC) for setting interest rates, even hinted that rates could be raised as early as this year.
On the rise: Michael Saunders, who sits on the Bank’s monetary policy committee, hinted rates could be hiked as early as this year
Households are experiencing a rising cost of living amid an energy crisis, labor shortages and chaos in the supply chain. The confluence of issues drives up the price of goods and energy bills soar.
Markets start to integrate a rate hike in December and in an interview with the Sunday Telegraph Saunders, that might not be far from the truth.
A rate hike would drive up costs for millions of households with variable mortgages and put pressure on companies that had taken on debt to make ends meet during the pandemic.
It would also increase the interest bill on the UK’s massive £ 2 trillion national debt pile. The nine-member committee will meet again in November and December.