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Bank of England Raises Interest Rate to 4.0%, Signals Slower Pace

The Bank of England (BoE) raised interest rates by 0.50% to 4.0% as expected by the market, marking the 10th consecutive interest rate hike. The vote was 7-2 in favor of the increase.

In its statement, the BoE indicated that future interest rate hikes may slow down, as inflation was likely to have peaked and interest rate hikes were starting to affect the economy. The bank also noted that further interest rate hikes were still possible, but only if inflation was at risk of staying higher for longer than anticipated.

The BoE raised interest rates by 0.50% to 3.50% at its December 2022 meeting and by 0.75% in November, the largest interest rate hike in 33 years since 1989. Analysts expect the BoE to raise interest rates by another 0.25% in the second quarter of 2023, taking the policy rate to a maximum of 4.25%.

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