La banque d'Angleterre relève les taux d'intérêt, suscitant des craintes de piège à faible croissance

Bank of England Raises Interest Rates, Causing Concerns of Low-Growth Trap

Paragraph 1: The Bank of England has increased interest rates to a 15-year high of 5.25%, raising fears that Britain's economy is stuck in a 'low-growth trap'. Chancellor Jeremy Hunt has warned that the economy is facing difficulties, particularly for homeowners who will be hit by higher mortgage rates. Financial experts have also predicted that rates could rise as high as 6% over the next year.

Bank's Decision and Impact on Consumers and Businesses

Paragraph 2: The Bank defended its decision, stating that inflation was becoming ingrained in the UK economy and that interest rates needed to be kept 'sufficiently restrict for sufficiently long' to ease rising costs. This is the 14th consecutive increase in interest rates, and experts suggest that better-than-expected inflation figures from last month meant that the rate rise had already been factored into deals. While some economists support the Bank's decision, others argue that more rate hikes will have little impact on long-term inflation but will cause pain for consumers and businesses, especially mortgage holders. Data from financial experts reveals that the average two-year fixed-rate mortgage is now 6.85%, while the average five-year rate is 6.36%.

Concerns and Immediate Effects on Homeowners

Paragraph 3: The rise in interest rates has sparked concerns among homeowners who worry about their ability to afford food and fuel. Some economists predict that inflation rates will not be reduced until later in 2024, which could negatively impact the Conservative Party's plans to boost the economy by the start of next year. Shadow Chancellor Rachel Reeves criticized the move, calling it a 'Tory mortgage bombshell' that will hit families hard. The rate rise will have immediate effects on mortgage holders. Those on tracker deals can expect an average increase of £23.71 per month, while those on standard variable rate mortgages could see an increase of £15.14 per month. Homeowners on fixed-rate deals may face bill shock when their current deal ends, as around 800,000 fixed-rate deals are set to expire in the second half of 2023.

The Daily Lightning

Today's concept is The Daily Lightning. The concept of The Daily Lightning refers to the daily fluctuations in economic indicators, such as interest rates, that can have immediate and significant impacts on various aspects of the economy. Just like a bolt of lightning, these changes can be sudden and unpredictable, causing concerns and reactions from individuals, businesses, and policymakers. The Bank of England's decision to raise interest rates is a prime example of The Daily Lightning, as it has sparked worries about the state of Britain's economy and its impact on households and the housing market. Understanding and navigating these rapid changes is crucial for economic stability and growth.