The Bank of England raises interest rates to 5.0 percent.
(Photo: dpa)
London The Bank of England (BoE) is accelerating the pace of combating inflation and is raising interest rates surprisingly sharply. The currency watchdogs around BoE boss Andrew Bailey raised the key monetary policy rate by half a point to 5.0 percent on Thursday.
Economists surveyed by the Reuters news agency had only expected an increase of a quarter point. It was the 13th rate hike in a row. The central bank has been trying to curb the alarmingly high inflation on the island for a good year and a half. With moderate success: the inflation rate has surprisingly remained at 8.7 percent, the highest value among the large western industrialized countries.
Fed Chairman Bailey recently warned that bringing inflation under control is likely to take much longer than expected. The so-called core inflation rate – which excludes fluctuating energy, food and tobacco prices – actually rose in May, climbing to 7.1 percent after falling to 6.8 percent in April.