UK interest rate hike makes property more attractive to Middle East investors

The UK’s interest rate hike was widely expected, and with inflation still expected to remain high, further increases are likely. This will provide Middle Eastern real estate investors with additional opportunities to invest in UK property market.

The Bank of England on Thursday raised its key interest rate by a quarter of a percentage point to 1.75 percent from 1.25 percent, its biggest increase since 1995. It warned that a recession was on the way and cited inflation as a threat.

The decision was widely expected by the bank’s Monetary Policy Committee. It was part of an attempt to bring inflation under control.

It has been criticized for taking too long to raise interest rates to combat the rising cost of living. The Consumer Price Index has reached a 40-year high of 9.4 percent.

The British pound has lost about 10% against the dollar this year due to various factors. Some of these include the country’s rising inflation and the conflict in Ukraine.

Rising interest rates can have a negative impact on asset markets. Investors who have mortgages are likely to feel the impact of rising inflation.

Although the impact of rising interest rates on asset markets will be lower for international investors, they will still pay more attention to the exchange rates.

The Bank of England has indicated that it is expecting a recession in the UK. This will cause real estate prices to moderate. UK house prices fell by 0.1 percent in July, marking the first drop in more than a year. In June, they had risen by 1.4 percent.

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