Pay rise surprise leads to forecasts of higher interest rates – BBC
By Daniel Thomas
Business reporter, BBC News
UK wages have risen at their fastest rate in 20 years, excluding the pandemic, raising expectations that UK interest rates will have to rise.
Regular pay excluding bonuses increased by 7.2% in the three months to April, although it still lags behind inflation – the rate at which prices rise.
The Bank of England has warned big pay rises are contributing the UK’s still-high rates of inflation.
It has put up interest rates 12 times since 2021 to try to slow price rises.
Higher interest rates may be good for savers, but are driving up repayment costs for millions of mortgage holders.
And fears the Bank of England will raise interest rates higher than previously thought – from their current 4.5% to as high as 5.5% – have been causing turbulence in the mortgage market,.
Lenders have been putting up rates and pulling hundreds of deals, causing uncertainty for borrowers.
“The renewed pick-up in wage growth in April will add fuel to the recent…
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