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Monetary policy: British central bank raises key interest rate again


The Bank of England is raising interest rates by a further 0.5 percentage points to four percent. But in their outlook, the central bankers indicate that the worst of inflation may be over.

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Headquarters of the Bank of England in London

Photo: Kin Cheung / dpa

In order to combat high inflation, the British central bank has once again raised its key interest rate significantly.

It rose another 0.5 percentage points to 4.0 percent, as the Bank of England announced after its interest rate meeting.

Most bank economists had expected it.

It is the tenth interest rate hike since the end of 2021. At the time, the interest rate was just above the zero line.

However, the monetary authorities are more cautious about the future.

The previous signal that forceful action would be taken against high inflation was weakened.

The word now is that further rate hikes are warranted as more persistent inflationary pressures are identified.

This could be taken as an indication of a slower pace of tightening or even a pause in interest rates.

The Monetary Policy Committee still does not speak with one voice.

Of the new members, two spoke out against the current rate hike.

The British economy is currently particularly exposed to many risks.

In addition to the war in Ukraine and the economic consequences as well as high inflation, these include above all ongoing problems as a result of Brexit and the violent waves of strikes that are sweeping the country.

The International Monetary Fund (IMF) assessed the economic prospects for Great Britain less favorably than for many other major industrialized nations this week.


Source: spiegel

All business articles on 2023-02-02

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