By Matthew Roscoe • 02 February 2023 • 13:10
The Bank of England has announced that it has raised interest rates once again.
In a statement, the BoE said: “Inflation has begun to fall, but it’s still well above our 2 per cent target.
“High energy prices are one of the main reasons for high inflation. Russia’s invasion of Ukraine led to large increases in the price of gas. Higher prices for the goods we buy from abroad have also played a big role.”
It added: “We know how hard the impact of higher inflation has been on people over the past year. Inflation hits the least well off the hardest.
“Low and stable inflation is vital for a healthy economy. An economy in which households and businesses can plan for the future with confidence and money holds its value.
“We expect inflation to fall quickly this year.
“We’ve raised our interest rate to 4 per cent this month.”
The Bank of England noted that “in total, since December 2021, we have increased our interest rate from 0.1 per cent to 4 per cent.”
It added: “We know that higher interest rates have a real impact on people’s lives.
“But by raising interest rates we can bring inflation down sooner, and make sure it stays low after that.”
According to the BoE, although inflation has begun to fall, in December 2022, prices “were still 10.5 per cent higher than a year ago.”
It added: “During the Covid pandemic people started to buy more goods. But the people selling these have had problems getting enough of them to sell to customers. That led to higher prices – particularly for goods imported from abroad.
“There is also pressure on prices from developments in the United Kingdom.
“Businesses are charging more for their products because of the higher costs they face. There are lots of job vacancies, as fewer people are seeking work following the pandemic. That means that employers are having to offer higher wages to attract job applicants. Prices for services have risen markedly.
“We have seen how hard the impact of higher inflation has been on people over the past year. Households have less to spend. As a result, the UK economy is not growing.”
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Originally from the UK, Matthew is based on the Costa Blanca and is a web reporter for The Euro Weekly News covering international and Spanish national news. Got a news story you want to share? Then get in touch at email@example.com.
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