Interest Rates COULD be on the up!
Daryl Jackson, News Editor
14 Sep 2017, 1:34 p.m.
The gold spot price fell by just over 1% in an hour on Thursday afternoon, after the Bank of England kept interest rates on hold, but warned that an increase was likely if inflation continues to surge. Gold dropped to its lowest level for more than a week to £990.65 t/oz from a high of £1,004.74 on Thursday afternoon.
It’s thought that a rise in inflation could send gold prices down as currencies become a more attractive proposition.
Minutes of the latest meeting of the monetary policy committee (MPC) showed a 7-2 vote in favour of no change to interest rates this month - keeping at their post-Brexit low of 0.25%. There is concern from the Bank of England that the UK economy could be under threat because if higher prices. Inflation is now above its 2% target.
A rise in UK inflation looks more possible as Theresa May’s government, under pressure from Labour, the TUC and Liberal Democrats announced it will break its own 1% cap for all public sector pay from next year, giving a green light further pay claims.
Meanwhile, the pound climbed nearly 1% against the dollar to $1.3314 after the Bank's announcement.