10% warning Inflation Bank of England Raises Rate to 1%

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10% warning Inflation Bank of England Raises Rate to 1%

Despite the growing risks to the economy as households endured one of the biggest annual declines in their income for decades, the Bank said a quarter-point rise was warranted to block persistently high inflation from taking hold, as the shock from soaring energy costs rippled through the global economy.

Against a backdrop of soaring international energy prices, household gas and electricity bills are expected to rise by 40% in October, after the government offset only some of last month’s record rise using measures outlined in Rishi Sunak’s spring statement.

Story Highlights

  • Threadneedle Street’s monetary policy committee (MPC) voted by a majority to raise its base rate from 0.75% to 1%, lifting the cost of borrowing to the highest level in 13 years, as it sounded the alarm over the risks from spiralling inflation exacerbated by Russia’s war in Ukraine.

  • Issuing a downbeat verdict as voters went to the polls in local elections, the Bank predicted Britain was on track for years of meagre economic growth as people cut back their spending to deal with the heavy blow to living standards.