Bank pushes up interest rates
The Bank of England has pushed up the lending rate to 4.25%, the third time since November that it has pushed up the rate in an effort to slow down house price rises and cut back consumer borrowing.
A survey of 25 economists by AFP was almost unanimous in predicting the rate would increase, following a number of reports which showed an increasing rosy economic picture.
Earlier this week, BDO’s output index of gross domestic product – an indicator of economic health – reached its highest level in a decade, up from 100.8 in January this year to 101.4 last month,
But the decision was complicated by a fall in consumer price inflation to 1.1% year-on-year in March, coming ‘perilously close’ to the 1.0% level that would require a letter of explanation by the Bank to the Treasury.
The Bank has been mandated by the Treasury to keep inflation as close to 2% as possible.