London : bank of england On Thursday raised its key interest rate to the highest level in 13 years as policymakers around the world battled inflation caused by high energy prices, Russia’s war. Ukraine And the concern about Covid-19.
of central bank monetary policy committee Voted 6-3 to raise interest rates for the fourth consecutive meeting, raising the rate at which the Bank of England pays other banks by a quarter-cent point to 1%. The minority wanted to increase it even more to 1.25%.
The decision comes a day after the US Federal Reserve intensified its attack on inflation, approving the biggest rate hike in more than two decades and indicating those are on the way. The Fed raised its key short-term rate by half a percentage point from 0.75% to 1%.
Other central banks around the world, from Sweden to Australia, have begun similar actions.
Rising consumer prices in the UK are exacerbating a cost-of-living crisis marked by rising energy bills and rising food and transport prices. The Bank of England is struggling to show it is serious about curbing inflation without moving so aggressively that it undermines consumer confidence.
“The Bank of England has a tough job ahead of it – inflationary pressures from external factors are getting higher and higher,” Dimitri TheodosiouThe head of foreign exchange and interest rates business at Investec said in a note to investors. “And with the cries of ‘high, high’ in the ears comes the knowledge that too much interference could hurt the economy.”
Britain’s inflation rate rose to a 30-year high of 7% in March, more than three times the central bank’s target of 2%. Economists expect inflation to reach 9% or more by the end of this year.
of central bank monetary policy committee Voted 6-3 to raise interest rates for the fourth consecutive meeting, raising the rate at which the Bank of England pays other banks by a quarter-cent point to 1%. The minority wanted to increase it even more to 1.25%.
The decision comes a day after the US Federal Reserve intensified its attack on inflation, approving the biggest rate hike in more than two decades and indicating those are on the way. The Fed raised its key short-term rate by half a percentage point from 0.75% to 1%.
Other central banks around the world, from Sweden to Australia, have begun similar actions.
Rising consumer prices in the UK are exacerbating a cost-of-living crisis marked by rising energy bills and rising food and transport prices. The Bank of England is struggling to show it is serious about curbing inflation without moving so aggressively that it undermines consumer confidence.
“The Bank of England has a tough job ahead of it – inflationary pressures from external factors are getting higher and higher,” Dimitri TheodosiouThe head of foreign exchange and interest rates business at Investec said in a note to investors. “And with the cries of ‘high, high’ in the ears comes the knowledge that too much interference could hurt the economy.”
Britain’s inflation rate rose to a 30-year high of 7% in March, more than three times the central bank’s target of 2%. Economists expect inflation to reach 9% or more by the end of this year.