Bank of England interest rate hiked to highest level since 2008. What BoE decision means for savers, mortgage holders

economictimes.indiatimes.com:

Bank of England (BoE) on Thursday made its 14th consecutive increase in interest rates, bringing them to their highest level since early 2008. The central bank raised interest rates by 25 basis points, setting them at 5.25 per cent. The bank emphasized that the persistence of high inflation makes it improbable for them to halt the rate hikes anytime soon, according to a Reuters report. Bank of England's move indicates that borrowing costs are likely to remain elevated for the foreseeable future. The initial response in the financial markets was mixed. The pound experienced a drop but later recovered some of the losses, while stocks remained in negative territory. Although energy prices are anticipated to decrease in the remaining months of the year, leading to a decline in inflation below 5 per cent in the fourth quarter, the government is on track to achieve its goal of halving inflation by the end of 2023. This achievement comes after experiencing a peak of 10.5 per cent at the beginning of the year.

Governor Andrew Bailey of Bank of England spoke to reporters after the British central bank raised its key interest rate by a quarter of a percentage point to 5.25 per cent on Thursday. «We expect inflation to take a further step down in the July data which will be published in two weeks time, I think that will come down to around 7 per cent at that point… followed by another larger step down in October's data,» Andrew Bailey said. «We do expect core goods inflation to ease over the rest of the year. And there are indicators that suggest it could happen faster than our projection,» Andrew Bailey said.

The Bank is persistently raising interest