Shoppers on Oxford Street walk past a sale sign in a shop window after the Bank of England has raised its key Base Rate again.Credit:AP
Rates have now risen by 3.4 points since their low of 0.1 per cent last December in the most aggressive set of hikes since 1989.
In a sign the bank was slowing the pace of increases as economic activity lags,the latest rate rise,which was in line with investors’ expectations,was smaller than the 0.75-point increase implemented in November.
The European Central Bank also announced an increase in its deposit rate from 1.5 per cent to 2 per cent,its highest level since the global financial crisis in 2008,and signalled that it would increase borrowing costs repeatedly by half a point in the coming months.
Governor of the Bank of England Andrew Bailey.Credit:Bloomberg
The US Federal Reserve and the Swiss National Bank both raised its benchmark rate by 0.5 percentage points on Wednesday. Western central banks are grappling with post-COVID labour shortages and the impact of Russia’s invasion of Ukraine on energy prices.
Bank of England Governor Andrew Bailey said on Thursday that there were signs inflation was now beginning to come down from its 41-year-high,but the bank still needed to raise rates to offset pressures from a tight labour market.
A group of striking postal workers stand around a fire as they picket outside a Royal Mail sorting office in London on December 14. Several unions are striking for better pay and conditions in Britain.Credit:Getty Images