December 15, 2022 (MLN): In an attempt to arrest rising inflation, the Bank of England (BoE) on Thursday decided to increase the interest rate by 50 basis points (bps) to 3.5%.
BOE started raising rates a year ago and over the course of nine policy meetings, the bank has lifted rates from 0.1% to 3.5% the highest since 2008.
“The labour market remains tight and there has been evidence of inflationary pressures in domestic prices and wages that could indicate greater persistence and thus justifies a further forceful monetary policy response,” the BoE said in a statement following its latest rate increase.
"We have increased the policy rate because inflation is too high. We think it will fall back quite sharply from the middle of next year and raising interest rate is the best way we have of making sure that happens", the Goveror BoE Andrew Bailey said on its official twitter handle.
Further he added, "I know that higher interest rates have a real impact on people lives. But by raising interest rates we can bring inflation down sooner and help the economy begin to grow and prosper once again."
