UK Central Bank Raises Base Interest Rate by 0.75%P to 3% (Comprehensive)

Rishi Sunak, Prime Minister of the United Kingdom
[Photo by Yonhap News]

[Asia Economy Reporter Donghyun Choi] The Bank of England (BOE), the central bank of the United Kingdom, has raised its benchmark interest rate to 3%, the highest level in 14 years.

On the 3rd (local time), the BOE's Monetary Policy Committee (MPC) raised the benchmark interest rate by 0.75 percentage points from 2.25% to 3.0%. This is the highest level since the global financial crisis in 2008. The increase was the largest in 30 years since "Black Wednesday" on September 16, 1992.

The UK benchmark interest rate surged from 0.1% to 3% in less than a year. Since starting rate hikes in December last year to curb inflationary pressures, the BOE has raised rates eight times.

Following two consecutive "big steps" of 0.5 percentage points each, this time the BOE implemented a "giant step" (a 0.75 percentage point increase in the benchmark interest rate).

The UK's consumer price inflation rate in September was 10.1%, the highest in 40 years. The BOE expects the inflation rate to reach 11% by the end of the year.

The BOE anticipates that the UK economy will remain in recession until mid-2024. The BOE stated, "Additional rate hikes may be necessary for the inflation rate to stabilize at the target level."

This content was produced with the assistance of AI translation services.