Connect with us

Hi, what are you looking for?


Bank of England raises rates by 50 basis points, disappoints investors

The Bank of England Thursday raised its benchmark interest rates by 50 basis points to 2.25 percent, disappointing investors who had largely bet on an even more aggressive hike.

The Bank’s Monetary Policy Committee was split on the decision. According to the statement “five members voted to raise Bank Rate by 0.5 percentage points, three members preferred to increase Bank Rate by 0.75 percentage points, to 2.5 percent, and one member preferred to increase Bank Rate by 0.25 percentage points, to 2 percent.”

The BoE’s announcement follows on the heels of the third 75-basis point hike by the U.S. Federal Reserve. This increased the risk of the pound falling further and, in turn, pushing up inflation via dollar-denominated energy imports.

Ahead of the announcement, the pound had fallen to levels not seen since 1985 — the year Mikhail Gorbachev became Soviet leader.

While the BoE was the first major central bank to lift interest rates in this cycle, but more recently others have opted for bolder steps. Earlier in the day, the Swiss National Bank raised rates by 75 basis points, as did the European Central Bank earlier this month. The Swedish Riksbank surprised with a whopping full one percentage point hike.

The Committee also voted unanimously to reduce the stock of purchased UK government bonds, financed by the issuance of central bank reserves, by £80 billion over the next 12 months, to a total of £758 billion, in line with the strategy set out in the minutes of the August MPC meeting.

Click to comment

Leave a Reply

Your email address will not be published.

You May Also Like


Press play to listen to this article Splits in the governing U.K. Conservative Party burst into the open Sunday as senior Tory Michael Gove...


King Charles III will not be traveling to Egypt for the COP27 climate summit next month, after U.K. Prime Minister Liz Truss advised him...


Press play to listen to this article A long-running campaign to oust World Bank President David Malpass — led by climate hawks within the...


Press play to listen to this article BIRMINGHAM, England — They say absence makes the heart grow fonder — and it’s the absent guests...


Joseph Webster is a senior fellow at the Atlantic Council’s Global Energy Center and edits the China-Russia Report, an independent newsletter. This article represents...


The EU wants to shame the world of crypto into greener practices — and Bitcoin is first in line. The world’s most popular crypto...


ROME — Giorgia Meloni, the far-right leader who is expected to head the next Italian government, said that Rome will start putting national interests first,...


Russian forces have abducted the head of Ukraine’s Zaporizhzhia nuclear power plant, Ukrainian operator Energoatom said on Saturday. Ihor Murashov, director general of the...