UK Raises Base Interest Rate by 0.25%P to 4.5% Annual... Highest in 15 Years (Update)

[Image source=Reuters Yonhap News]

On the 11th (local time), the Bank of England raised its benchmark interest rate by 0.25 percentage points. This brought the UK's benchmark interest rate to 4.5% per annum, marking the highest level in about 15 years since the global financial crisis.

On this day, the Bank of England (BOE), the UK's central bank, announced at its monetary policy meeting that it had decided to raise the benchmark interest rate by 0.25 percentage points to 4.5% per annum. Since December 2021, when the rate was 0.1%, the BOE has consecutively raised rates 12 times.

This move by the Bank of England is due to the consumer price inflation rate continuing its high-level surge, reaching double digits. The UK's inflation rate rebounded after four months, rising by 0.3 percentage points to 10.4% annually in February. Although it fell to 10.1% annually in March, it remained higher than expert forecasts.

This level is five times the BOE's inflation target of 2%, making it the highest among the Group of Seven (G7) and Western Europe. In particular, food price inflation hit its highest level since 1977.

The market is closely watching how long the BOE's rate hikes will continue. It is reported that two out of the nine monetary policy committee members dissented in favor of holding rates steady at this meeting. Some speculate that considering recession concerns and falling oil prices, the rate hikes may soon end. Conversely, there are also forecasts that the benchmark interest rate could be raised to 5.0% around August.

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