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UK hikes interest rates for second time in a decade

The United Kingdom got only its second interest rate hike in over a decade on Thursday. Brexit will decide w...

Posted: Aug 2, 2018 2:25 PM
Updated: Aug 2, 2018 2:25 PM

The United Kingdom got only its second interest rate hike in over a decade on Thursday. Brexit will decide whether it gets another one any time soon.

The Bank of England raised its benchmark rate to 0.75% from 0.5% despite worries over the strength of the UK economy and uncertainty over Brexit.

The hike will make UK mortgages and loans more expensive, but should boost returns on cash tucked away in domestic savings accounts.

Some economists have raised doubts about the case for the rate hike.

Bank of England Governor Mark Carney has previously warned of dire economic consequences if Britain leaves the European Union in March 2019 without a comprehensive Brexit deal.

"We expect the Bank of England to wait until after Brexit in March 2019 before hiking again," said Kallum Pickering, senior economist at Berenberg.

Crashing out of the bloc without a deal could require the UK central bank to slash interest rates and introduce emergency measures in an effort to steady the financial system and wider economy.

The central bank acknowledged the risks on Thursday, saying in a statement that "any future increases in Bank Rate are likely to be at a gradual pace and to a limited extent."

"The Monetary Policy Committee continues to recognize that the economic outlook could be influenced significantly by the response of households, businesses and financial markets to developments related to the process of EU withdrawal," it added.

Carney said during a press conference that improving wage growth and a strong labor market led to the unanimous vote for a rate hike. He said the central bank wanted to act now instead of waiting for Brexit.

"We can't just wait wait wait through all of that," he said, adding that the bank is prepared to react quickly if economic conditions change.

Carney said the Bank of England is working closely with the UK Treasury and the European Central Bank to plan for a smooth Brexit transition that protects financial markets.

Related: Sanofi and Novartis are stockpiling drugs to prepare for Brexit

Central banks in many advanced economies have raised interest rates and moved to end stimulus programs as the global economy shakes off the lingering effects of the global financial crisis.

The US Federal Reserve has been steadily raising interest rates since late 2015. It held rates steady on Wednesday, but current plans involve at least two more hikes this year.

Minnesota Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 91422

Reported Deaths: 2031
CountyConfirmedDeaths
Hennepin26147923
Ramsey10595318
Dakota7250125
Anoka5836132
Stearns383324
Washington362755
Scott247333
Olmsted232927
Nobles193816
Blue Earth16166
Wright15497
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Rice13098
Mower13015
Clay128840
Sherburne110914
Kandiyohi9362
Winona85318
Lyon6554
Waseca5508
Freeborn5263
Steele5262
Benton5173
Nicollet51316
Watonwan5114
Todd4812
Chisago4621
McLeod4612
Le Sueur4464
Crow Wing44418
Otter Tail4024
Beltrami3805
Martin34310
Goodhue3409
Itasca28913
Pine2870
Polk2774
Isanti2680
Douglas2672
Becker2512
Carlton2461
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Morrison2131
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Meeker1872
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Rock1590
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Cass1343
Faribault1330
Swift1231
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Houston1150
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Fillmore1100
Koochiching1103
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Stevens931
Pope890
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Grant594
Wilkin573
Lake560
Norman520
Marshall501
Lac qui Parle471
Mahnomen461
Red Lake381
Traverse300
Clearwater260
Lake of the Woods211
Kittson120
Cook60

Iowa Coronavirus Cases

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Confirmed Cases: 81296

Reported Deaths: 1284
CountyConfirmedDeaths
Polk15404259
Woodbury506463
Johnson502827
Black Hawk439688
Linn3832108
Story334017
Dubuque289141
Scott283528
Dallas270038
Pottawattamie200638
Buena Vista195512
Marshall176434
Sioux14163
Wapello128057
Webster120914
Clinton108020
Muscatine107854
Plymouth106220
Crawford10215
Cerro Gordo100721
Warren9396
Jasper78332
Des Moines7477
Marion7345
Tama69531
Carroll6445
Henry6314
Lee6097
Wright5651
Dickinson4876
Boone4808
Bremer4717
Washington44011
Louisa42615
Mahaska35819
Delaware3493
Franklin34418
Hamilton3173
Jackson3103
Floyd3063
Winneshiek3045
Clay3014
Benton2921
Hardin2851
Winnebago27813
Lyon2694
Butler2632
Clarke2613
Poweshiek2588
Buchanan2551
Emmet25310
Allamakee2516
Jones2513
Shelby2501
Clayton2383
Kossuth2370
Guthrie2315
Cedar2261
Chickasaw2250
Sac2220
Cherokee2122
Grundy2103
Madison2072
Fayette2032
Iowa1931
Harrison1892
Howard1836
Mitchell1830
Humboldt1773
Calhoun1762
Hancock1762
Mills1681
Palo Alto1650
Pocahontas1542
Lucas1536
Monroe15110
Monona1421
Page1420
Cass1392
Osceola1390
Jefferson1341
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Taylor1251
Union1233
Davis1184
Van Buren1111
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Fremont900
Montgomery905
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Adams290
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