Russia Raises Interest Rate to 15% after Steep Climb in Inflation

GUARDIAN EUROPE: Two-point rate rise surprises analysts as central bank blames 6.6% inflation on consumer demand

Russia’s central bank has increased interest rates by more than expected, to 15%, after a steep rise in inflation.

The bank blamed the war-torn economy’s limited capacity to respond to an increase in consumer demand for the rise in inflation to 6.6% in October, from 6% in the previous month.

Even with the increase in borrowing costs, inflation is expected to carry on climbing to 7.5% by the end of the year, the central bank said, before falling back to 4% next year. » | Phillip Inman | Friday, October 27, 2023

Bank of England Says Interest Rates Will Remain High for At Least Two Years

THE GUARDIAN: Policymakers vote for quarter-point rise to 5.25%, the 14th increase in a row, as Bank rules out prospect of recession

The Bank of England has warned businesses and households that the cost of borrowing will remain high for at least the next two years as it raised interest rates for the 14th consecutive time to 5.25%.

Ruling out the likelihood of a recession over the next two years, policymakers blamed strong wages growth in recent months for the need to increase interest rates by 0.25 percentage points to the highest level for 15 years.

Officials on the Bank’s monetary policy committee (MPC) said the economy had proven more resilient during a period of high interest rates than they expected when they last made an assessment of the UK economy in May. (+ video) » | Phillip Inman | Thursday, August 3, 2023

Bank of England Raises Interest Rates to 3.5% in Ninth Increase in a Year

THE GUARDIAN: Majority of MPC rate-setters back hike of 0.5 percentage points despite fears UK is entering a long recession

The Bank of England has raised interest rates by 0.5 percentage points to 3.5% in an effort to combat double-digit inflation that has caused a widespread cost of living crisis.

Members of the central bank’s monetary policy committee (MPC) voted to increase the cost of borrowing after the consumer prices index in November showed annual inflation of 10.7%.

A majority of the Bank’s rate-setting committee said the ninth increase in the base rate over the past year was necessary to bring down inflation by 2025 to its 2% target. » | Phillip Inman | Thursday, December 15, 2022

Worst Economic Prediction for a Generation - as UK Heads for Recession

Bank of England Raises Interest Rates to 1.75% in Biggest Hike in 27 Years

THE GUARDIAN: Policymakers increase base rate by 0.5 percentage points, the sixth rise in a row as the cost of living soars

The Bank of England has raised interest rates by 0.5 percentage points to tackle the soaring cost of living, despite concerns that the economy is heading for a recession. » | Phillip Inman | Thursday, August 4, 2022

WARNING FROM THE BANK OF ENGLAND:

Bank of England warns the UK will fall into recession this year: The Bank of England has warned that the UK will fall into recession this year as it raised interest rates from 1.25% 1.75% in a bid to curb soaring prices. »


Bank of England hikes interest rates and says inflation will hit 13%: Base rate raised by 0.5 percentage points to 1.75%, as Bank predicts prolonged recession starting later this year »

Turkey: Soaring Inflation Puts Erdogan under Pressure | DW News

Dec 16, 2021 • Turkey's lira crashed 7% in just a few minutes to a record of nearly 15 lira to the dollar. At the same time, inflation is soaring. Under pressure from President Recep Tayyip Erdogan, the central bank is expected to cut its policy rate later this week.

Bank of England Must Raise Interest Rates Before Its [sic] Too Late, Warns Chief Economist Spencer Dale
THE DAILY TELEGRAPH: The Bank of England is at risk of gradually losing public confidence due to persistently above-target inflation, posing an upward risk to future prices, the central bank's chief economist, Spencer Dale said on Thursday.

Mr Dale – who voted for higher interest rates this month and last – broadly defended the BoE's past policy decisions in a speech to asset managers, but said it was now time to tighten what he described as "extraordinarily loose" monetary policy.

Unlike some of his colleagues on the nine-strong Monetary Policy Committee, Mr Dale said he was wary about the apparent stability of public medium- and long-term inflation expectations in surveys.

"I'm cautious about how much comfort we can take from the relative stability in these measures," he said.

"Although some economists may like to think otherwise, most companies and households have far better things to do than spend time formulating detailed expectations of the rate of inflation likely to prevail in five or 10 years time."

He said the bank's credibility could dissipate slowly over time, posing a major upside risk to the BoE's current forecasts of inflation falling back to target.

Specifically, the risk was that the public would think the BoE was prepared to tolerate very lengthy periods of above target inflation, rather than take rapid action to bring prices back to target, Mr Dale said. Read on and comment » | Thursday, March 24, 2011

Savers Will Gain; Debtors, Lose. Interest Rate Set to Rise Again
THE TELEGRAPH: Mervyn King, the governor of the Bank of England, last night issued a stark warning to indebted households, fuelling fears that borrowing costs could soon rise to six per cent.

He said that families should borrow on the assumption that interest rates were going to rise further.

The warning came amid growing evidence that many thousands of households have over-extended themselves, with consumer debt and insolvencies at record levels. Bank chief hints at rate rise to 6pc (more) By Edmund Conway and Harry Wallop

Mark Alexander

Dramatic Interest Rate Cut in Iran Sends Banks into Shock and People into Panic
Thanks to Roberts Spencer of Jihad Watch, where I became aware of this story…

THE GUARDIAN:

· President's shock order defies expert advice
· Bank shares plummet amid rampant inflation

Iran's financial system suffered a fresh jolt yesterday with panic selling on the stock market after the president, Mahmoud Ahmadinejad, abruptly ordered banks to cut interest rates sharply, despite surging inflation.

The order, which Mr Ahmadinejad issued by telephone during a visit to Belarus and which flew in the face of expert advice - has triggered warnings of a financial crisis and spiralling corruption amid fears of a capital flight from the country's lending institutions. Iran interest rate cutsparkspanic selling (more) By Robert Tait

Mark Alexander