Bank of England raises interest rate by 50 bps to 4 pc; warns more hikes in the future

London: Bank of England raised interest rate by 50 basis points to 4 percent, the 10th increase since UK’s central bank started hiking in December 2021, bringing the key rate to its highest since 2008, Bloomberg reported.

IBNS • 2 Feb 2023, 09:50 pm

BOE said more hikes will be needed if signs of inflationary spiral persisted, said the report.

Seven of the nine-member of the UK’s apex bank’s Monetary Policy Committee backed the key policy rate hike while two members voted in favor of no change.

UK’s economy is fighting inflation, which is lingering near a 40-year high, and coping with a grim economic outlook.

According to the report, Silvana Tenreyro and Swati Dhingra voted to leave rates unchanged, saying the impact of past increases has yet to take full effect, while Catherine Mann, who gave a thumbs up for a 75 basis-point increase last time, joined BOE Governor Andrew Bailey and the majority of MPC members in calling for 50 basis points.