The Bank of England raised the rate to 5%
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The Monetary Policy Committee of the Bank of England, at a meeting on June 22, decided to raise the bank rate by 0.5 percentage points to 5%, which was the highest value since 2008. About this reported on the regulator’s website.
The step for the 13th consecutive increase in the rate increased – at a meeting on May 10, the regulator raised rate by 0.25 p.p. The decision, like last time, was supported by seven members of the committee, two more voted for keeping the rate at the same level.
The Bank of England noted that consumer inflation decreased from 10.1% in March to 8.7% in April in annual terms, remaining at the same level in May, down 0.3 percentage points. above the forecast. At the same time, the regulator emphasizes that by the end of the year the indicator will “significantly” decrease due to cheaper energy resources.
The regulator expects inflation to return to the target of 2% in the medium term. Economists polled by Reuters predicted rate increase to 4.75%.
15 June European Central Bank (ECB) raised for the eighth time in a row, the key rate at 25 bp. up to 4%. The regulator noted that, according to June forecasts, headline inflation in 2023 in the euro area will be 5.4%, in 2024 – 3%, in 2025 – 2.2%. At the same time, economic growth forecasts for this and next year were lowered from 1.1% to 0.9% and from 1.6% to 1.5%, respectively. In 2025, an increase of 1.6% is expected.
The eurozone economy shrank by 0.1% in 2023 Q1. On June 8, European Commission spokeswoman Werle Nyts confirmed the start of a recession. The decline in collective GDP in the euro area is the second quarter in a row. A similar trend was recorded in the fourth quarter of 2022.
June 14 Federal Reserve System (FRS) USA kept base rate at the level of 5-5.25% per annum. The regulator noted the growth of economic activity at a “moderate pace”. Unemployment remains low, while inflation is still elevated. Inflation in the United States in June slowed to 4% in annual terms from 4.9% a month earlier, which was the lowest since May 2021.
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