Economic Buzz: Bank Of England Raises Key Rate By 75Bps

4 Nov 2022 , 09:07 AM

The Bank of England raised its benchmark rate by 75 basis points on Thursday, which was the biggest increase since 1989. The nine-member Monetary Policy Committee decided to raise the bank rate to 3.00 percent from 2.25 percent. The BoE expects the economy to shrink 0.5 percent in the third quarter of 2022 and by 0.3 percent in the fourth quarter. The UK economy is expected to remain in recession throughout 2023 and the first half of 2024. GDP is expected to recover only gradually thereafter. In September, inflation rose 10.1 percent, the highest since the series began in January 1997. Inflation is expected to pick up to around 11 percent in the fourth quarter of 2022. Inflation is projected to fall sharply to around 5 percent by the end of next year and to fall below the 2 percent target in the medium term, although the Committee judged that the risks to the inflation projections are skewed to the upside.Powered by Commodity Insights