Bank of England hikes rates to a 15-year high of 5%

The Bank of England said its nine-member Monetary Policy Committee decided to lift its main interest rate by half a percentage point to a fresh 15-year high of 5%.

The BoE has raised borrowing costs for the 13th time in a row to combat stubbornly high inflation, which has failed to come down from its peak as quickly as expected.

In a statement on Thursday, the bank said the increase, which was the bank's 13th in a row, was somewhat of a surprise, with most economists predicting a smaller quarter-point hike. The committee warned of further increases to come.

“If there were to be evidence of more persistent pressures, then further tightening in monetary policy would be required,” the bank said.

Meanwhile, Central banks around the world, from the US Federal Reserve to European Central Bank, have rapidly raised interest rates to bring down inflation first stoked by supply chain backups tied to the rebound from the pandemic and then Russia's invasion of Ukraine.

Source: Media reports