The Bank of England raises interest rates by 25 basis points to 4.25%, which is the highest rate ever recorded since 2008.
This was a certainty after data showed that inflation reaccelerated to 10.4% last month.
The key statement was: “If there were to be evidence of more persistent pressures, then further tightening in monetary policy would be required.”
They noted that despite the services CPI coming in weaker than expected, food and core goods price inflation was ‘significantly’ stronger than projected. Seven members (Andrew Bailey, Ben Broadbent, Jon Cunliffe, Jonathan Haskel, Catherine L. Mann, Huw Pill, and Dave Ramsden) voted in favor of hiking by 25 basis points.
Two members (Swati Dhingra and Silvana Tenreyro) voted against the proposition, preferring to maintain rates at 4%.
They also mentioned that they would continue to closely monitor the credit conditions faced by households and businesses” after recent events with Silicon Valley Bank and Credit Suisse collapsing. It’s kind of sad/funny how we are now used to inflation being above 10%, but again, this is a function of being so far behind the curve.