Britain’s central bank, the Bank of England (BoE), raised its key interest rate by 50 basis points on Thursday, as expected. It is now at 4 percent, the highest level since 2008.
It is already the tenth rate increase in the UK since the end of 2021. The aim is to contain sky-high inflation. UK inflation remains above 10%. The Bank of England does not rule out further rate hikes.
The central bank also believes that the British economy has entered a period of recession for five quarters at the beginning of this year. The recession will be less deep than previously thought: the Bank of England assumes an economic contraction of 0.5 percent in 2023 and 0.25 percent in 2024, compared to 1.5 percent and 1 percent, respectively, in November.
On Wednesday, the US central bank actually raised the key interest rate there by 25 basis points. The European Central Bank (ECB) will announce its interest rate decision on Thursday afternoon. Analysts expect an increase of 50 basis points.
It is already the tenth rate increase in the UK since the end of 2021. The aim is to contain sky-high inflation. UK inflation remains above 10%. The Bank of England does not rule out further rate hikes. The central bank also believes that the British economy has entered a period of recession for five quarters at the beginning of this year. The recession will be less deep than previously thought: the Bank of England assumes an economic contraction of 0.5 percent in 2023 and 0.25 percent in 2024, compared to 1.5 percent and 1 percent, respectively, in November. On Wednesday, the US central bank actually raised the key interest rate there by 25 basis points. The European Central Bank (ECB) will announce its interest rate decision on Thursday afternoon. Analysts expect an increase of 50 basis points.
