The regulator made this decision against the backdrop of high inflation, which now stands at 13%.
The Bank of England raised its base interest rate at the fastest pace since 1995, by 50 basis points to 1.75% from 1.25%. This was reported on the regulator’s website on Thursday, August 4.
The rate itself is now at its highest level since December 2008, when it was 2%.
The Bank of England made this decision against the backdrop of high inflation, currently at 13%. The regulator predicts the economy will start contracting in the last quarter of 2022 and continue to contract throughout 2023, making it the longest recession since the global financial crisis of 2008-09.
Inflation is rising mainly because of the sharp increase in energy prices after Russia’s invasion of Ukraine. This would result in household incomes falling for two consecutive years, the largest decline since 1964.
It should be noted that record inflation is now being observed in many countries of the world, which is why central banks are raising key rates. In the past, such decisions were made in the United States and the European Union.
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Source: korrespondent
I am Dylan Hudson, a dedicated and experienced journalist in the news industry. I have been working for Buna Times, as an author since 2018. My expertise lies in covering sports sections of the website and providing readers with reliable information on current sporting events.