Bank of England Hikes Interest Rates

In the midst of rising inflation, the Bank of England has given a big setback in the UK as well. After the increase in interest rates by the US Federal Reserve, now the Bank of England has also increased interest rates in Britain. 

The Bank of England has reduced the interest rates from 1% to 1.25% to curb the ever-increasing inflation. This is the fifth consecutive increase. It is worth noting that inflation in the country is currently at a 40-year high of 9% and the bank has warned that it may cross 11% by the end of 2022. 

For information, it is necessary to note that the Federal Reserve in America had announced to increase interest rates by 0.75% on Wednesday. The Bank of England has warned that rising energy prices are expected to raise the cost of living even more in October, so the action will have to be taken if inflationary pressures persist. 

Of the nine members of the bank's monetary policy committee, six voted for raising rates to 1.25%, while three favored a larger hike of 1.5%. According to the report released in this regard, it is expected from the minutes of the bank's meeting that the UK economy will shrink by 0.3% in the April-June period.