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Banks Hold Rates as Energy Prices Rise
The Bank of England is expected to keep its interest rate at 3.75%. Oil and gas prices rose after the Iran war started.
Energy prices are surging across markets. This is pushing traders to bet on rate hikes.
Traders expect hikes from both the Bank of England and the European Central Bank. Both banks are announcing their latest decisions.
Klear Note — Interest rates control how much banks charge to lend money. Higher rates make borrowing more expensive. Energy prices affect inflation, which central banks try to control.
Key Terms 5
- interest rate
- the cost banks charge to lend money
- Bank of England
- the main bank that controls money in the United Kingdom
- European Central Bank
- the main bank that controls money across Europe
- rate hike
- when a bank raises its interest rate, making borrowing more expensive
- traders
- people who buy and sell money, stocks, or goods for profit