News Karnataka
Sunday, June 04 2023

Bank of England hikes rates to curb soaring inflation

Bank of England
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London: The Bank of England (BoE) has raised interest rates for the second time in seven weeks to fight a surge in inflation.

At its meeting late on Wednesday, the bank’s Monetary Policy Committee (MPC) voted to increase the so-called “Bank of England base rate” by 0.25 percentage points to 0.5 per cent, citing “the current tightness of the labour market and continuing signs of greater persistence in domestic cost and price pressures”, reports Xinhua news agency.

Thursday’s announcement came as the UK’s annual consumer price index (CPI) inflation jumped to a 30-year high of 5.4 per cent in December 2021.

In a statement, the bank said it expected the CPI to continue to rise “to close to 6 per cent in February and March, before peaking at around 7.25 per cent in April”.

The MPC voted by a narrow majority of five votes to four, with those in the minority preferring to increase the rate to 0.75 per cent, the statement noted.

In mid-December 2021, the BoE raised the interest rate for the first time in more than three years after cutting it to a record low during the Covid-19 pandemic.

The decision came as the annual CPI inflation in the country rose to a decade high of 5.1 per cent in November last year.

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