The Bank of England has raised interest rates from 0.1% to 0.25%, which is the first rate hike in more than three years, saying that even if the Omicron coronavirus wave sweeps the UK, inflation risks require it to take preemptive action.
On Thursday, the financial market unexpectedly voted 8 to 1 in favor of interest rate hikes for the second consecutive month. The bank’s monetary policy committee decided that it could not wait any longer before seeking to cool down economic spending.
The Bank of England said that a strong economy means that the conditions it set for raising interest rates have been met, and the impact of Europe and the United States on inflation is “unclear at this stage”.
It added that the UK spring inflation rate is expected to rise to around 6%.