Bank Of England Lifts Interest Rate To 15-Year High

The Bank of England on Thursday lifted its key interest rate to the highest level since the 2008 financial crisis, noting inflation is stubbornly high but that the economy would now avoid recession this year.

The BoE increased the rate by a quarter-point to 4.5 percent, its 12th increase in a row with UK annual inflation stuck above 10 percent, fuelling a cost-of-living crisis across Britain.

Global policymakers are battling elevated inflation caused largely by runaway energy bills following last year’s invasion of Ukraine by major oil and gas producer Russia.

Following a regular policy meeting, the BoE warned of “considerable uncertainties” on when UK inflation would return to its two-percent target, as soaring food prices offset sharp drops to energy costs.

At the same time, the central bank made a record upgrade to its British GDP forecast, adding there would be only a little impact from recent turmoil in the commercial banking sector.