The English (Boe) bank (Boe) is expected to lower the interest rates.
Analysts predict that the reference rate will be reduced from 4.75% to 4.5%, because the bank is under pressure to encourage the UK economy that shows slow growth.
The bank rate is a primary tool that aims to control inflation, and hope has increased after the inflation rate – which shows the cost of living – fell to 2.5% in the year to December, the BBC reports.
However, he remains above the Bank of 2%, and the changes in the budget will increase.
Economic uncertainty has increased due to the introduction or threat of import duties by the US President Donald Trump. They could lead to inflationary pressure on the global level, causing a harmful effect on price growth in the UK.
Why are interest rates changing?
The Bank moves the rates up and down to try to control inflation, which measures the pace of total price growth.
By increasing interest rates, borrowing is upgraded, so people have less money for wear. People can also be encouraged to save more.
In return, this reduces the demand for goods and slows down the speed of price growth.
It is a balancing – increasing borrowing costs risk to harm economies because companies discourage investment and job creation.
When price growth is more under control, the Bank will consider reducing interest rates.
The base interest rate greatly affects the rates that banks in High Street (Stock Exchange) and other lenders charge customers for loans, credit cards and other financial affairs.
This is most obviously seen in mortgage costs. The basic rate reduction would have a direct impact on those who have “Tracker” mortgages.
