Business Headline News

Bank of England to hike interest rates

The Bank of England has said it will “not hesitate” to hike interest rates to curb inflation after the pound fell to a record low against the US dollar.

The Bank said it was “monitoring developments closely” and would make a decision on any action in November.

Its statement came after the Treasury said it would publish a plan to tackle debt in a bid to reassure investors.

In Asia currency market trade on Tuesday, the pound rose by more than 1% to top $1.08.

On Monday, some UK lenders said that they were halting new mortgage deals.

Halifax, the UK’s largest mortgage lender, said it would temporarily withdraw all mortgage products that come with a fee due to the market volatility.

Virgin Money and Skipton Building Society have also stopped offering mortgage products to new customers.

Experts said a rise in the cost of long-term borrowing due to the market turmoil meant the cost to lenders of offering new mortgage deals was too expensive.

Sterling fell to an all-time low earlier against the US dollar after Chancellor Kwasi Kwarteng pledged further tax cuts at the weekend on top of Friday’s mini-budget where he announced the biggest tax cuts in 50 years.

The pound had been sliding as global markets reacted to the sharp increase in government borrowing required to fund the cuts.

Writing by Omotola Oguneye