The central bank hiked rates for the fourth time since December as U.K. inflation runs at 30-year highs. Its Monetary Policy Committee voted 6-3 to lift the rate that the Bank of England pays other banks by a quarter-percentage point, to 1%. The three members in the minority wanted to raise it even higher — by half a point to 1.25%, the bank said, in a sign of growing momentum for strong action to counter rising consumer prices.
It said those developments and COVID-19 restrictions in China have worsened the supply chain shocks that the United Kingdom and other countries face. Other central banks around the world, from Sweden to Australia, also have started taking similar action. “The Bank of England has a difficult job ahead of it — inflationary pressures from external factors are getting higher and higher,” Dmitri Theodosiu, head of foreign exchange and interest rates trading at Investec, said in a note to investors. “And with the cries of ‘higher, higher’ ringing in the ears comes the knowledge that too much intervention could see a damaging fall to the economy.”
Canada needs to do more to curb inflation. Interest rates need to go up further now or people will continue to look deeper into their pockets to make ends meet.