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BOE Raises Rates to 0.75% | Asian Markets Plunge on Trade War Fears
Published August 2, 2018
The Bank of England has raised the interest rate for only the second time in a decade. The rate has risen by a quarter of a percent, from 0.5% to 0.75% – the highest level since March 2009. The move will increase the interest costs of more than three-and-a-half million residential mortgages that have variable or tracker rates.
Markets in Asia dropped overnight, erasing more than $220 billion off the region’s stocks as a fresh round of trade war fears has rattled investors. The move came after the White House confirmed that President Trump asked US Trade Representative Robert Lighthizer to consider hiking duties to 25% as early as next month.
The bullion market has suffered its worst start to a year in almost a decade as US investors pulled money out of gold-backed funds. Analysts are indicating that strong US economic performance, tied with a strong American position in geopolitical tensions, have cemented expectations for rate rises in the second half of the year.
Turkey’s lira has fallen to a record low against the greenback. Stocks have dropped and bond yields rose after the US, a NATO ally, imposed unprecedented sanctions over the continued detention of an American pastor.