Financial News: Bank Of England Lifts Rate By 25 Bps

Bank Of England Lifts Rate By 25 Bps

05/11/2023 - 07:37:00 (RTTNews)

(RTTNews) - The Bank of England decided to lift the benchmark interest rate by a quarter-point as expected on Thursday to address the risk of more persistent strength in domestic price pressures.

The nine-member Monetary Policy Committee decided to lift the bank rate by 25 basis points to 4.50 percent, the highest since 2008.

Seven members of the panel voted for a quarter point hike, while Swati Dhingra and Silvana Tenreyro again sought to maintain the status quo.

The BoE has raised its benchmark rates at every rate-setting session since December 2021.

The bank said economic activity has been less weak than expected in February. The MPC judged that the path of demand is likely to be materially stronger than expected in the February Report.

The labor market is forecast to remain tighter than in the February Report in the near term. The jobless rate is estimated to remain below 4 percent until the end of 2024, before rising over the second half of the forecast period to around 4.5 percent.

Inflation is forecast to decline to a little above 4 percent at the end of two and three-year horizons and materially below the 2 percent target.

"The MPC will adjust Bank Rate as necessary to return inflation to the 2% target sustainably in the medium term, in line with its remit," the bank said.

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