The Reserve Bank of India on Wednesday raised interest rates for the second straight meeting, but retained its "neutral" stance as it aimed to contain inflation while not choking growth.
The latest policy decision could translate into higher equated monthly instalments (EMIs) for home, auto and other loans, if the banks pass on the burden to borrowers.
HDFC Bank raised rates for deposits above Rs 50 million to a range of 4.25-7 per cent, effective Thursday.
"The proportion of respondents viewing the European Union and Brexit as one of the most important concerns facing the United Kingdom shot up from 46% to 58% in July, the highest reading in the history of the index which dates back to 1974".
The Bank of England raised its benchmark rate to 0.75% from 0.5% despite worries over the strength of the United Kingdom economy and uncertainty over Brexit. If rates do go up to 0.75% that will be highest since early 2009.
Bank Governor Mark Carney said the hike, only the second since the financial crash forced rates down to an historic emergency low, warned of further rises ahead.More news: All your questions about 3D guns answered
"The Bank of England has hiked rates and the hawkish tone of the statement has taken markets slightly aback".
Several private-sector economists have challenged the BoE's view that inflation pressures are building and say raising rates now only risks a U-turn by the central bank if Britain fails to get a Brexit deal.
Inflation, as measured by the consumer prices index (CPI), rose by 2.4% in the year to June. If interest rates are 1% or more by the time the economy sails into stormier seas, policymakers will at least be able to cut rates a couple of times before cranking up the printing presses for more QE.
"It's very unlikely that the conditions over the next six to eight months will warrant another move in monetary policy", said Dean Turner, U.K. economist at UBS Wealth Management.
Around two thirds of its mortgage customers are now on fixed-rate products and so will not see their rate change during their fixed-rate period.
The central bank said inflation in two years' time was likely to be 2.09 percent, above the BoE's 2 percent target. The BoE said that further rate hikes would be gradual and limited and the market is now pricing in the next 0.25% hike in September 2019. The calculation is based on a standard variable rate of 3.99% on a £250,000 20 year mortgage and a tracker rate 2% above the Bank rate.