London June 16 2022: The Bank of England stuck to its gradual increases in interest rates on Thursday, as other central banks took more urgent action, but said it was ready to act “forcefully” if needed to stamp out dangers posed by inflation it now sees topping 11%.
A day after the U.S. Federal Reserve raised rates by the most since 1994 with a 75 basis-point hike, the BoE increased Bank Rate by another 25 basis points as it warned that Britain’s economy would shrink in the April-June quarter.
The nine-strong Monetary Policy Committee voted 6-3 for the 25 basis-point hike in Bank Rate to 1.25%, the same breakdown as in May with the minority voting for a 50 basis-point increase.
The British benchmark rate is now at its highest since January 2009, when it slashed borrowing costs as the global financial crisis raged. It was the fifth time the BoE has raised rates since December when it became the first major central bank to tighten monetary policy following the COVID-19 pandemic.
