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BoE raises interest rates to its highest level since 2009

By August 2, 2018September 27th, 2022No Comments

The Bank of England raised interest rates midday today.

The MPC raised rates from 0.50% to 0.75% and it is the highest level in 9 years.

From January to March 2018, the UK economy has grown by 0.2%. Members of the Bank are suggesting that the slow expansion was momentary and that in Q2, they expect the economy to grow by 0.4%.

Back in June, only three of the nine policymakers voted for rates to rise to 0.75%, however, it takes five votes for changes to be made to the policy.

BoE governor, Mark Carney was expected to “stress that the August hike is a slow and steady step on the MPC’s path to normalisation”.

BoE explained the August rate rise and said: “…the economy has developed broadly as expected. So, we have removed a little of the support, raising interest rates from 0.5% to 0.75%.”

BoE is expected to stick with its original guidance, but further interest rate rises would “…happen at a gradual pace and to a limited extent.”