BOE Hikes Key Rate by 50 Basis Points to 5%

The transcript discusses the recent decision by central banks to raise interest rates, despite concerns from economists that such a move might signal panic. The decision aims to control inflation, which has been unexpectedly high, but raises the risk of a recession in the UK. This situation poses challenges for Prime Minister Rishi Sunak, whose priorities include fighting inflation and growing the economy. The rate hike also increases pressure on mortgage borrowers, prompting calls for Chancellor Jeremy Hunt to provide support, although he is cautious not to oppose the Bank of England.

What was the concern among economists about raising interest rates by 50 basis points?

• It would reek of panic.

• It would signal a lack of confidence.

• It would have no impact.

• It would be too conservative.

What is the potential consequence if interest rates reach 6% according to Bloomberg Economics research?

• A recession in the UK.

• A decrease in inflation.

• A significant increase in exports.

• A boom in the housing market.

What is one of the main challenges for the UK Prime Minister in the context of rising interest rates?

• Increasing the national debt.

• Balancing inflation control with economic growth.

• Improving international trade relations.

• Reducing unemployment rates.

How does the rise in interest rates affect mortgage borrowers?

• It makes it easier to obtain loans.

• It increases the risk of repossessions.

• It has no effect on them.

• It decreases their monthly payments.

What is the Chancellor's stance on opposing the Bank of England's decisions?

• He is eager to oppose them.

• He is indifferent to them.

• He fully supports opposing them.

• He does not want to go against them.