Bank of England raises base rate to 1 per cent to tackle soaring inflation

The Bank of England has raised interest rates by 0.25% to 1 per cent, in a bid to curb soaring inflation. The monetary policy committee voted on 5th May 2022 to raise the Base Rate to it’s highest level in 13 years, since the financial crisis of 2009.

The central bank has hiked the base rate of interest in recent months to try and tame inflation, which has surged ahead of the bank's 2 per cent target each month since May last year. Inflation reached a 30-year high in March of 7%, and is expected to continue to surge for months to come.

Developments in Ukraine are said to have exacerbated greatly the combination of adverse supply shocks that the United Kingdom and other countries continue to face.

The central bank now expects interest rates to rise to 2.5 per cent by mid-2023, before falling to 2 per cent.