Bank of England raises key rate to 5% – Kommersant
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The Monetary Policy Committee of the Bank of England approved by a majority vote uplift the key rate by 0.5 percentage points – up to 5% per annum. The last time it was so high was in September 2008, that is, at the height of the global financial crisis.
The decision of the committee, which raises the key bank rate for the 13th time in a row, was affected by several economic factors at once. First of all, the inflation rate (CPI) following the results of May turned out to be higher than expected by the Bank of England: it remained at the April level (8.7%), while analysts and members of the Central Bank Committee expected inflation to decline to 8.4%. At the same time, the target indicator of the Bank of England is inflation at the level of 2%.
“The Monetary Policy Committee will continue to closely monitor signs of continued inflationary pressures in the broader economy, including tight labor market conditions and wage growth and service price inflation. If signs of more persistent inflationary pressure appear, further tightening of monetary policy will be required.
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