The Bank of England raised its base interest rates by half a percentage point. Only one of the nine members of the Monetary Policy Committee voted for a more moderate rate rise. The Bank of England continues its uncompromising campaign against exceptionally high inflation.
Bank of England base rate vote
Eight of the nine members of the Bank of England’s Monetary Policy Committee voted in favour of raising the base rate from 1.25 to 1.75 percent. A single member proposed a more modest rate rise of just a quarter percentage point. This follows a statement by the Bank of England after its monetary policy Sessions.
What is behind the constant rise in inflation?
“Inflationary pressures in the UK have intensified significantly since the May meeting of the Monetary Policy Committee,” the Bank of England said in a statement. Central bankers identified rising prices of energy commodities as the main factors behind the increase in inflation due to the reduction of natural gas supplies from Russia to the European Union.
According to the Bank of England, this has led to a dramatic acceleration in wholesale prices and consumer prices. Inflation would thus remain at elevated levels through 2023 before it started to return to the 2% target. The Bank of England raised its rates about a week after the US Fed made a similar decision.