It’s the seventh straight hike in interest rates, but a smaller increase than many investors had expected, The Guardian reported.
Today’s rate hike – the second straight 50 basis point hike – shows the bank is trying to prevent inflation from becoming permanent despite concerns about the economy.
The Bank’s Monetary Policy Committee’s decision takes interest rates to their highest levels since 2008, The Guardian reported.
Britain is already in recession, the Bank of England fears, in part because of the Queen’s funeral bank holiday.
Bank officials have revised down their growth forecasts and now predict GDP will contract by 0.1 percent in the third quarter of the year.
This would follow the 0.1 percent drop recorded in April-June – which would be the second straight quarterly contraction.
A month ago, the bank had predicted that the economy would grow 0.4 percent from July to September.
But weaker-than-expected growth of just 0.2 percent in July and Monday’s bank holiday for the state funeral have led it to cut its forecasts.
https://economictimes.indiatimes.com/news/international/world-news/bank-of-england-says-uk-in-recession-as-it-raises-interest-rates-to-14-year-high/articleshow/94378229.cms bank of england: Bank of England says UK in recession as it raises interest rates to 14-year high