Britain’s housing market and consumer economy kept most of their momentum last month, lending figures from the Bank of England showed today, leaving the central bank on track to raise interest rates for the first time in more than decade on Thursday.
Moreover, with inflation at a five-year high of 3.0 percent and unemployment at its lowest in more than 40 years, the BoE looks on track to raise interest rates on Thursday for the first time since 2007, reversing a rate cut made in August 2016.
The initial impact of raising rates back to 0.5 percent – their level for seven years until August 2016’s rate cut – may be muted for most Britons.
The dollar slipped this morning after its biggest weekly rise this year as investors took profits before a central bank decision this week where markets are waiting to see if strong economic data will spur a more hawkish stance.
Meanwhile, the euro climbed 0.20 percent to $1.1632 following a drop in Spain’s borrowing costs as nerves settled after a weekend poll showed Catalan secessionists may lose their majority in elections scheduled for December.
The euro, one of the best performing currencies this year, has been hit in recent weeks as a dovish European Central Bank combined with unrest in Catalonia has prompted some investors to take profits.