Bank of England raises key rate to 0.75% in surprise unanimous vote

RBI rate hike worries real estate sector

The Czech central bank raised interest rates on Thursday for the fifth time in a year.

The Bank of England has signalled the financial crisis is finally over with the decision to lift interest rates to the highest level in a decade.

Rohit Poddar, managing director, Poddar Housing and Development Ltd, said, "I personally believe that the home buyers should not worry as it will be hard for many banks to increase the interest rate".

The monetary policy committee (MPC) kept its stance neutral, aiming to contain inflation at 4% within a 2% band, thus making future rate hikes possible. It is the first time since October 2013 that the rate has been increased at consecutive policy meetings.

SNP economy spokesperson Kirsty Blackman MP added: "The hike in interest rates will deliver a further blow to the living costs and standards of millions of families across the United Kingdom, who are already feeling the squeeze as prices rise too fast".

RBI Governor Urjit Patel said the RBI survey of households reported an uptick of 20 basis points in inflation expectations.

The Bank of England has raised interest rates to the highest level in nearly a decade.

England opts to bat vs India in 2nd ODI; teams unchanged
Despite the run rate creeping over 10, the former Indian skipper took plenty of time to settle and could not get his eye in. The stars of the match were Kuldeep and Rohit, who thrashed hosts batsmen and bowlers through out the match.

The central bank said that if the economy grows as expected, "an ongoing tightening of monetary policy over the forecast period would be appropriate" but Carney repeated its phrase that rate hikes will be limited and gradual.

Several economists had challenged the need for a rate hike now, given not only the Brexit risks but also the potential damper on global growth from U.S. President Donald Trump's tariffs on imports, and counter-moves by other countries.

It is thought the Bank's latest set of forecasts in the accompanying inflation report will reinforce the case for a rise, with many economists expecting growth to have recovered to 0.4% in the second quarter after slowing to 0.2% in the previous three months. It has also been observed that the degree of transmission of the lending rate is more than that of the deposit rates.

But he predicts a quarter-point rise every six months until rates reach 1.5% in 2020.

Borrowers not on fixed-rate interest are likely to see an increase in their loan repayments, but the lender has to legally give you notice in order to do this, subject to the terms and conditions of your account. However, it's ultimately up to the banks about how much their want to increase this. In a rising rate scenario, it makes huge sense for customers repaying loans to make periodic principal pre-payments. And the "new normal" was half that, at 2-3% once inflation is included.

Rana Kapoor, MD & CEO, Yes Bank: The RBI rate hike is a rational response to the recent acceleration in inflation momentum.

VK Sharma, Head Private Client Group & Capital Market Strategy, HDFC Securities: By hiking rates by another 0.25 percentage points the central bank is now fully ahead of the curve.

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