Bank of England raises key rate to 4%
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Monetary Policy Committee of the Bank of England voted for an increase in the key lending rate by 0.5 percentage points to 4%. This is the highest level in the last 14 years. Seven out of nine committee members voted for the rate increase.
The increase, explains the Central Bank, should help reduce inflation to 2%. The new rate will be in effect until at least March 23, that is, until the next committee meeting.
As noted in a separate committee report, the UK government’s measures are already helping to reduce rising inflation. So, at the end of December, it amounted to 10.5%, while by the end of 2023 the inflation rate should drop to 4% on an annualized basis.
“The economy has been hit by a series of very large and overlapping shocks. Monetary policy ensures that as the economy continues to adjust to these shocks, inflation will steadily return to the 2% target over the medium term. Monetary policy is also aimed at ensuring that long-term inflation expectations are also tied to the 2% target,” the central bank said in a statement.
On the Fed’s increase in the key rate to the highest level in 16 years – in the material “Kommersant” “The Fed is coming to the end of the cycle”.
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