Bank of England To Raise Interest Rates To Highest Level Since 2008

The Bank of England is (BOE) set to raise interest rates later Thursday, May 11, 2023, to their highest level since late 2008 as it continues to combat stubbornly high inflation in the UK, Pan Pylas reported for the Associated Press (AP).

Photo Insert: BOE started raising interest rates in late 2021 from a low of 0.1% to keep a lid on price rises that were largely stoked by bottlenecks due to the lifting of coronavirus lockdown restrictions and subsequently by Russia’s invasion of Ukraine.

Financial markets expect the bank’s nine-member Monetary Policy Committee to lift its main interest rate by a quarter of a percentage point to 4.5%, its 12th straight increase.

Other major central banks, such as the US Federal Reserve and the European Central Bank (ECB), have also been raising interest rates at a consistent pace in order to get inflation rates down from multi-decade highs.

The BOE started raising interest rates in late 2021 from a low of 0.1% to keep a lid on price rises that were largely stoked by bottlenecks due to the lifting of coronavirus lockdown restrictions and subsequently by Russia’s invasion of Ukraine.

Alongside its interest rate decision, the bank will be publishing its quarterly economic projections for the stagnating UK economy.

With inflation currently running at a higher-than-expected annual rate of 10.1%, economists will be interested to see how quickly the bank expects inflation to get back toward its target of 2%. If it thinks inflation will fall rapidly over the coming months, the pressure on it to raise interest rates further will likely diminish.

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