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BoE Raises Interest Rates by 0.25% to Curb Record High Inflation

At its meeting today, the Bank of England (BoE) raised its key interest rate by 0.25% to 0.75%, bringing rates back to pre-COVID-19 levels in early 2020.

The BoE raised interest rates at its third meeting due to inflation concerns following the Russian military incursion in Ukraine.

Inflation in the UK rose to 7.1% in February from 5.5% in January, the highest level in 30 years or since March 1992, and also well above the BoE’s inflation target of 2%.

The BoE forecast inflation of 7.25% in April and said that further rate hikes would depend on the medium-term inflation outlook.

Meanwhile, the pound gained against the dollar and the euro. The pound rose 0.34% to $1.319 and rose against the euro by 0.12% to 0.838.

The BoE had previously decided to raise its policy rate to 0.25% from 0.1%, its record low, at its December 2021 meeting, becoming the first major central bank in the world to raise rates since COVID-19 broke out in early 2020.

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