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David Milliken and Andy Bruce
LONDON (Reuters) – The Bank of England raised its key interest rate on Thursday 0.25 percentage points to 4.5%, Governor Andrew Bailey said the Bank of England would “keep interest rates on hold “of course” as it tries to curb the fastest inflation of any major economy.
BoE no longer predicts recession after making biggest improvement to its growth forecasts since it first published forecasts 10.
but it now projects inflation – still higher than % in March – Decline rate The slower-than-expected increase was largely due to an unexpectedly large and sustained increase in food prices. It also has stronger wage growth than previously thought.
“We have to stay the course to make sure that inflation goes all the way back to the 2% target,” Bailey said at the start of the news conference. It then stressed that the BoE would not be giving any signals on its next move, which would depend on the data.
Policymakers voted for a 7-2 rate hike in May, in line with economists’ expectations in a Reuters poll, MPC member Silvana said. Again Tenreyro and Swati Dhingra are against further tightening. 500
GRAPH: Bank of England raises interest rates Consecutive https://inew.news/wp-content/uploads/2023/05/localimages/chart.png645ceed738a0f.png 59
A Reuters poll last week showed that most economists expect a 25 basis point rise in May – bringing borrowing costs back to their level since
highest level since – Before the suspension period.
But investors have been betting on more rate hikes, and shortly after Thursday’s decision, they expected a peak of nearly 5% this fall.