The Bank of England (BOE) increased the policy rate by 50 basis points to 2.25%. The resolution was passed by a vote of 4 to 5. 3 members voted for 75 basis points, 1 for 25 basis points. Thus, the rate hikes continued in the 7th month. The bank also increased its policy rate by 50 basis points last month.
The Central Bank has been continuing to increase interest rates since December due to the sharp rise in inflation.
This year, approximately 90 Central Banks have increased interest rates.
Bank officials cut their inflation forecasts from 13 percent to below 11 percent. It was stated that a deep recession could be avoided with the energy support plan of the new Prime Minister Liz Truss. The Committee stated that if inflationary pressures are 'persistent', they will react vigorously as necessary. The policy rate was expected to increase by 50 basis points to a large extent, but there was also the expectation that the Fed could raise 75 basis points after yesterday's 75 basis points increase. Annual inflation in the country fell to 9.9 percent in August, but was still well above the bank's 2 percent target. The BOE predicts that inflation, which peaked in October, will remain in double digits for a few more months.
While the Fed increased interest rates by 75 basis points at its meeting yesterday, many Central Banks increased interest rates today. This year, approximately 90 Central Banks have increased interest rates. Half of them increased by at least 75 basis points in one go.