British central bank is pushing ahead with rate hike

Bank of England in the City of London

London The Bank of England is the first of the major central banks in the world to increase interest rates since the outbreak of the corona pandemic. The key monetary policy rate was surprisingly raised on Thursday to 0.25 from 0.1 percent, as the Bank of England announced on Thursday after the meeting of the monetary policy committee in London.

The monetary authorities are reacting to the rapid rise in prices on the island. At 5.1 percent, inflation has surpassed the central bank’s target by far.

The majority of analysts had nevertheless expected interest rates to remain unchanged. However, the experts were not entirely sure how the Bank of England behaved: The inflation in the Kingdom is high, which speaks for rising interest rates. At the same time, however, the new Corona variant Omikron is spreading rapidly and dampening economic activity.

The prices are driven, among other things, by the sharp rise in energy costs as well as the shortage of materials and delivery bottlenecks resulting from the pandemic crisis. These factors are also fueling inflation in the US, so that the US Federal Reserve is considering several rate hikes for next year.

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