As the title says, numerous banks in the U.K., maybe across the world, are raising interest rates on mortgages, and the given reason is cause inflation hasn’t fallen as much as expected. Can anyone give me a basic inflation, other than greed, as to why they’d do this?

  • deegeese@sopuli.xyz
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    7 months ago

    Government lends money to banks. Banks lend money to homeowners.

    When inflation is too high, the government charges banks higher interest, so banks charge customers higher interest.

    Fewer people take out loans, so there is less cash circulating in the economy, which dampens inflation.

    At least that’s how it’s supposed to work.