- The Bank of England is expected to keep Bank Rate at 3.75% for a sixth consecutive meeting, with the MPC divided on whether a hike is needed before the end of the year.
- UK CPI rose to 3.1% in August from 2.9% in July, driven by petrol, diesel and airfares, and higher global energy costs have not fully passed through to consumers.
- Oil prices moved above $100 a barrel on 9 September and have remained there amid the Iran war, a level Governor Andrew Bailey flagged as a trigger for higher interest rates.
- Major UK lenders have already raised fixed-rate mortgage costs, with the average two-year fix at 5.77% and five-year fix at 5.83%, according to Moneyfacts.
Quotes
“If we get a continuation of this conflict going on and oil prices stay above $100 a barrel... the odds are that interest rates will have to go up higher.”
“the inflation dragon has not been fully slain”
“We are already seeing lenders reprice upwards, so this will do little to calm things down.”