The Bank of England (BoE) raised its key interest rate by 25 basis points to 1.25%. This is the fifth straight hike. During previous meetings, the Bank of England raised its key interest rate by a total of 90 basis points.
The Bank of England said it would “take the necessary steps to return inflation to the 2% target in a sustainable manner over the medium term”.
Inflation in Great Britain has risen to a 40-year high, 9%. Annually, it is fed by the most expensive energy.
Policymakers face the unenviable task of keeping consumer prices in check in the context of slowing economic growth, while the UK faces a severe cost-of-living crisis.
The Organization for Economic Co-operation and Development (OECD) expects the UK to be the weakest economy in the G7 next year as high interest rates, tax increases and a downward spiral in food and energy prices weigh on households.
The Bank of England expects UK GDP to fall 0.3% in the second quarter. While I expected earlier that there would be an increase of 0.1 percent.
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