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Pound crisis: First British banks impose a credit freeze

2022-09-27T10:17:06.206Z

The British pound has fallen to an all-time low in the past few days, and the central bank is raising interest rates. Now the first banks on the island are suspending the granting of loans.



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Financial district of London: First banks suspend lending

Photo: DANIEL LEAL-OLIVAS/ AFP

At times, the British pound fell to an all-time low of $1.0327 on Monday.

In response, several UK banks and building societies have suspended lending.

The reason for the price slide was the announcement of tax breaks and an enormous national debt by the new British government.

The providers Halifax, Virgin Money and the Skipton Building Society announced earlier in the week that they would temporarily no longer offer certain loans, the PA news agency reported.

In most cases, existing contracts are not affected.

New offers are to come onto the market shortly – presumably with adjusted conditions.

The British central bank is expected to raise interest rates again.

Market observers believe that interest rates of more than six percent are possible in the coming year.

The Bank of England said on Monday that it would monitor developments on the financial markets closely and raise interest rates if necessary in order to bring inflation under control.

Just a few days ago, she had set the key interest rate at 2.25 percent, an increase of 0.5 percent.

It was the seventh rate hike in a row.

pam/dpa

Source: spiegel

All business articles on 2022-09-27

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