Bank of England raises UK interest rates to highest level since 2008

The Bank of England has raised interest rates to their highest level since late 2008 as it continues to combat stubbornly high inflation in the UK.

The decision on Thursday by the bank’s nine-member Monetary Policy Committee to lift its main interest rate by a quarter of a percentage point to 4.5 per cent was widely anticipated in financial markets. The increase was its 12th in a row.

Like other central banks around the world, the Bank of England has sought to keep a lid on inflation, which over the past year has been fuelled by Russia’s invasion of Ukraine.

That sent energy prices soaring, a development that then led to price increases across a wide array of goods and services.

The Bank of England (BoE) was poised to raise borrowing costs for the 12th meeting in a row on Thursday, as it tries to tackle stubbornly high inflation that stands at double the level of the United States and much higher than in the euro zone too.

A poll of economists by Reuters earlier this month showed most expected the BoE would hold rates at 4.5% for the remainder of this year after an increase in May.

But as per the forecast of Goldman Sachs that borrowing costs in Britain will keep on going up to a peak of 5% in August after recent data showed little let-up in price pressures and an economy that is defying forecasts of a recession.

(With inputs from Reuters and AP)

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