The Bank of England just made its biggest rate hike in 27 years
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Loading... - Abel Komen
- 05 Aug 2022
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The Bank of England raised the cost of borrowing by 50 basis points to 1.75% — the sixth time the central bank has raised rates since December, and follows recent hikes by the European Central Bank and Federal Reserve to tame runaway prices.
In June, annual consumer prices rises reached a four-decade high to hit 9.4%, plunging millions of Britons into a cost-of-living crisis that has forced many to choose between 'heating or eating'.
The central bank said in a Thursday press release that inflationary pressures had "intensified significantly" in recent weeks.
"That largely reflects a near doubling in wholesale gas prices since May, owing to Russia's restriction of gas supplies to Europe and the risk of further curbs," it said.
The Bank of England has also forecast inflation to rise above 13% in the autumn, when energy bills are due to increase, and to "remain at very elevated levels throughout much of 2023."
But the Resolution Foundation, a think tank, said on Wednesday that it expects energy costs to drive consumer price inflation past 15% next year.
Wage rises are failing to keep up. Real pay for UK workers suffered its biggest drop in more than two decades between March and May, official data showed last month.
Britons have tightened their belts in response, spending less in supermarkets and ditching their streaming subscriptions. Read More…
