Bank of England raises interest rates to highest level since 2008

By another half a point
Bank of England raises interest rates to highest level since 2008
A general view of BoE (Image courtesy: Reuters)

The Bank of England (BoE) raised interest rates by another half a point to 2.25 percent, taking it to the highest level since late 2008.

According to several media reports, BoE made the decision to increase the interest rate by 50 basis points.

Its monetary policy committee voted by 5-4 for the rate hike, with three members calling for a bigger rise and one arguing for it to be smaller

British news outlets said that the bank had anticipated that the economy would expand during the current fiscal quarter, but now thought it would contract by 0.1 percent.

Following a second quarter in which the economy shrank by 0.2 percent, the economy has effectively entered a recession as a result of this.

The Monetary Policy Committee reported that after the government announced plans to freeze energy prices for individuals early this month, the inflation rate is not forecasted to increase as much as previously predicted.

In Britain, consumer prices rose 9.9 percent in August from a year earlier, slowing slightly from the previous month but still near the fastest pace of inflation in four decades, as energy and food prices climbed higher.

Since December, BoE has raised rates seven times, starting from a record low of 0.1 percent.

On Wednesday, the Federal Reserve raised its key rate by three-quarters of a point, moving it to a range of 3 to 3.25 percent.

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