LONDON (AP) – The Bank of England (BoE) raised its key interest rate to the highest level in 13 years yesterday as policymakers around the world combat inflation.
The central bank hiked rates for the fourth time since December as United Kingdom (UK) inflation runs at 30-year highs.
Its Monetary Policy Committee voted 6-3 to lift the rate that the BoE pays other banks by a quarter-percentage point, to one per cent.
The three members in the minority wanted to raise it even higher – by half a point to 1.25 per cent, the bank said, in a sign of growing momentum for strong action to counter rising consumer prices.
“Global inflationary pressures have intensified sharply following Russia’s invasion of Ukraine.
This has led to a material deterioration in the outlook for world and UK growth,” the bank said.
It said those developments and COVID-19 restrictions in China have worsened the supply chain shocks that the UK faces.
Soaring consumer prices in the UK are fuelling a cost-of-living crisis marked by surging energy bills and rising food and transport prices.
Britain’s inflation rate rose to a 30-year high of seven per cent in March, more than triple the central bank’s target of two per cent. Economists expect inflation to reach nine per cent or more later this year.
