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>> The Bank of England has increased bank rate for the first time in a decade, raising it by a quarter of a percentage point to a half a percent.>> Bank of England governor, Mark Carney, confirming that UK rates are finally on the way back up. That after a decade of cuts following the global financial crisis.
On the trading floor in London, I’m Reuters reporter Julian Satterthwaite. No great sense of shock here, of course. The hike could be well trailed. Even Carney had hinted at it. But this is unfamiliar territory in one respect. After all, if you're a trader here, you have to be at least in your early 30s to have ever dealt with a rate hike during your working life.
For consumers, it may be more of a shock. Payments on mortgages, loans and credit cards, all set to rise. A novel experience for about eight million young adults. But the bank says a hike is needed as price rises creep higher.>> Inflation is unlikely to return to the 2% target without some increase in interest rates.
>> Economists aren't convinced. 70% of those polled by Reuters say a sluggish economy and weak wage growth mean it's no time for a hike.>> Why aren't you invested in->> This strategist says that doubters need to see the global picture.>> Today's hike will start to have implications that are felt across the markets quite quickly, in that we're now into a properly coordinated normalization of global interest rates.
Remember, it's gonna happen in the States next month as well.>> The Governor tried to keep everyone happy on Thursday. Carney reassured skeptics that any future rate rises would be, quote, very gradual. Sterling fell back as he emphasized the cautious outlook. But with so many critics, this looks like the biggest call in his time at the helm.
Carney's legacy is on the line.