Bank of England (BoE) announced on Thursday that it has decided to raise the benchmark interest rate by 25 basis points. In order to curb inflation, the bank agreed to raise the interest rate to 1% from the previous 0.75%. At the meeting that ended on May 4, the Monetary Policy Summary (MPC) "voted by a majority of 6-3" in favor of the 0.25 percentage point increase. "Those members in the minority preferred to increase Bank Rate by 0.5 percentage points, to 1.25%," it was written in the statement.
"Global inflationary pressures have intensified sharply following Russia’s invasion of Ukraine. This has led to a material deterioration in the outlook for world and UK growth. These developments have exacerbated greatly the combination of adverse supply shocks that the United Kingdom and other countries continue to face. Concerns about further supply chain disruption have also risen, both due to Russia’s invasion of Ukraine and to Covid-19 developments in China," the statement read.
