Breaking: Bank of England raises interest rates

Breaking: Bank of England raises interest rates.

BREAKING NEWS – The Bank of England raises interest rates from 0.25 per cent to 0.5 per cent, in an announcement made on Thursday, February 3.
Rates are now at their highest level in more than two years, and the Bank of England decision means households will be paying more in mortgage and loan repayments after inflation jumped to its highest level in ten years.
At its meeting ending on February 2, 2022, the Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 5-4 to increase Bank Rate by 0.25 per cent points, to 0.5 per cent, a statement read.
“Those members in the minority preferred to increase Bank Rate by 0.5 percentage points, to 0.75 per cent. The Committee voted unanimously for the Bank of England to begin to reduce the stock of UK government bond purchases, financed by the issuance of central bank reserves, by ceasing to reinvest maturing assets.
“The Committee also voted unanimously for the Bank of England to begin to reduce the stock of sterling non-financial investment-grade corporate bond purchases, financed by the issuance of central bank reserves, by ceasing to reinvest maturing assets and by a programme of corporate bond sales to be completed no earlier than towards the end of 2023 that should unwind fully the stock of corporate bond purchases,” the statement continued.
Interestingly, the bank raised its growth forecast for the economy to 7.25 per cent in 2021, but cut the outlook to 3.75 per cent in 2022 and 1.25 per cent in 2023, from the 5 per cent and 1.5 per cent respectively predicted in November 2021.
According to the Mirror, the Bank of England has been under pressure to hike this rate to help cool inflation amid the cost of living crisis in the UK.
The move is the second increase to the base rate in two months.
On Thursday, December 16, the Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 8-1 to increase bank rate from 0.1 per cent to 0.25 per cent and unanimously voted for the Bank of England to maintain the stock of sterling non-financial investment-grade corporate bond purchases, financed by the issuance of central bank reserves, at £20 billion.

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