More bad news for borrowers as interest rates go up again – with worse to come

It’s a good time to be a banker, at least for those towards the top of the hierarchy who qualify for fancy bonuses linked to revenues and profits.

First, the government is proposing to cut tax for banks by £1bn to promote the City’s competitiveness. Now the Bank of England has hiked interest rates to 0.5 per cent, in what is the first back-to-back rise since 2004. That’s just gravy.

The vote in favour of a 0.25 per cent increase was 5-4, when many forecasters had expected it to be unanimous. But it was, at least, in favour of a rise. The dissent arose over the size. There were four hawks on the Monetary Policy Committee (MPC) who voted in favour of boosting rates to 0.75 per cent.

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