LONDON (AP) — The Bank of England raised interest rates to their highest level since late 2008 as it continues to combat stubbornly high inflation in the U.K.
The decision on Thursday by the bank’s nine-member Monetary Policy Committee to lift its main interest rate by a quarter of a percentage point to 4.5% was widely anticipated in financial markets. The increase was its 12th in a row.
Like other central banks around the world, the Bank of England has sought to keep a lid on inflation, which over the past year has been fueled by Russia’s invasion of Ukraine. That sent energy prices soaring, a development that then led to price increases across a wide array of goods and services.
The Bank of England started raising interest rates in late 2021 from a low of 0.1% in order to keep a lid on price rises that were first largely stoked by bottlenecks resulting from the lifting of coronavirus lockdown restrictions and subsequently by Russia’s invasion of Ukraine, which led to energy prices surging.
In documents accompanying its decision, the bank said food prices have stayed higher for longer than expected. As a result, it said, consumer price inflation is expected to decline less rapidly than previously thought.
The bank is tasked with keeping inflation at around 2%. It currently stands at just over 10%.
