Bank of England raises interest rates again as UK faces inflation at 30-year high

The Bank of England has raised interest rates for the third consecutive time as Great Britain faces its highest inflation rate in 30 years, CNBC reported. 

The Bank’s Monetary Policy Committee approved by an 8-1 vote a 0.25 percentage point hike to its main Bank Rate, bringing it to 0.75 percent.  

In its report released on Thursday, the Bank of England said, “Global inflationary pressures will strengthen considerably further over coming months, while growth in economies that are net energy importers, including the United Kingdom, is likely to slow.” 

The bank is expecting inflation to increase further in the coming months to nearly 8 percent at the end of the second quarter, and perhaps even higher later this year, according to CNBC. 

The committee last month imposed back-to-back interest rate hikes for the first time in 18 years and upped its forecast for inflation to a 7.25 percent peak next month, coming amid the backdrop of strong growth and a robust labor market in the country. 

Russia’s ongoing invasion of Ukraine has also added to inflation concerns and caused energy prices to surge.

Great Britain’s economy grew up to 7.5 percent last year as it rebounds from economic slowdowns amid the earlier stages of the COVID-19 pandemic. 

Quilter Investors portfolio manager Paul Craig told CNBC that a double-digit inflation rate is not off the table.

The Bank of England “had no choice but to keep raising rates. It is looking to build in some insurance now should there be a slowdown in economic growth or employment comes in worse than feared,” he said.