Bank of England set to raise rates to 5.25% as high inflation persists

London, July 28 (BNA):  The Bank of England looks likely to raise rates by a quarter-point to 5.25% on Aug. 3, though economists and markets see a risk of a repeat of June’s surprise half-point hike as inflation remains hotter than in other big economies. 


Still, that inflation rate is nearly four times the BoE’s 2% target and double the rate in the United States, reports Reuters.


Ramsden said the fall had been driven more by short-term moves in energy prices, with less softening in longer-term pressures. 


The picture from Britain’s job market is mixed. Wage growth excluding bonuses held at an annual rate of 7.3% in the three months to May, the joint highest since records began in 2001.


However, unemployment rose unexpectedly to a 16-month high of 4% as more people entered the labour market, and employers advertised fewer job vacancies. 


“The interpretation of the data … is dependent on the eye of the beholder and could be deployed to make the case for (increases of) either 25 basis points or 50 basis points,” RBC economists Peter Schaffrik and Cathal Kennedy said.



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