Reeling from a surge in energy prices caused by Russia's invasion of Ukraine, the BoE's Monetary Policy Committee voted 8-1 for a half percentage point rise in Bank Rate to 1.75% - its highest level since late 2008 - from 1.25%.
"Returning inflation to the 2% target remains our absolute priority. There are no ifs and buts about that," he told a news conference. Bailey said had"huge sympathy" for stretched households who feel that rising interest rates will make life harder.MPC member Silvana Tenreyro voted for a smaller 25-basis-point increase.
Ushering in the slowdown, consumer price inflation was now likely to peak at 13.3% in October - the highest since 1980 - due mostly to the surge in energy prices following Russia's invasion of Ukraine. British consumer price inflation hit a 40-year high of 9.4% in June, already more than four times the BoE's 2% target, triggering industrial action and putting pressure on whoever becomes prime minister to come up with further support.
In its new forecasts, the BoE saw inflation falling back to 2% in two years' time as the hit to the economy took its toll on demand.The British central bank has now raised rates six times since December but Thursday's move was the biggest since 1995.
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