Britain, May 30, 2024: Another increase to the key interest rate has been announced by The Bank of England (BoE), the 13th consecutive rate hike by the central bank to curb inflation that is unyielding in Britain.
The Bank of England’s Monetary Policy Committee (MPC) has decided to increase the rate by a quarter to five percent following a seven to two-vote. This new rate represents the most it has been since 2008.
The reason for this decision, according to BoE, “is to bring inflation back to the sustainable 2% objective in the medium term”. Presently, the UK’s inflation rate is way above the 2% target of the central bank at 10.1%.
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The UK public and business sectors will feel the effect of higher borrowing costs. BoE’s move will cause increments in mortgage rates, business loans, and personal loans likewise.”
That said, some economists think that the BoE could be close to the end of its rising rate cycle, given that inflation is slowing down while the economy is still with the possibility of going into decline.
Businesses, consumers, and policymakers will closely monitor the consequences of the central bank’s monetary policy decisions while it fights against inflation.
