LONDON (Reuters) – The Bank of England (BoE) announced a three-quarter point increase in its key interest rate on Thursday, its biggest increase since 1989, while warning of a “very difficult” economic outlook.
The UK base rate has thus been raised from 2.25% to 3%, as expected by the majority (46 out of 52) of economists polled by Reuters.
This new rate hike was voted for by seven out of the nine members of the Monetary Policy Committee (MPC), Silvana Tenreyro has voted for a quarter point increase and Swati Dhingra for a 50 basis point increase.
“Further rate hikes may be needed to bring inflation back on target sustainably, albeit at a lower peak than financial markets expect,” the institution said in a statement.
(Reporting by David Milliken; French version by Laetitia Volga, editing by Marc Angrand)