Bank of England Raises Rates to 1%, Recession Risks Looms

The Bank of England raised interest rates to their highest since 2009 at 1% on Thursday to tame down inflation now heading above 10%.

The BoE’s nine rate-setters voted 6-3 for the quarter-point rise from 0.75%.

The BoE said it was also worried about the impact of China’s COVID-19 lockdown policies which threaten to hit supply chains again and add to the inflation pressure.

The BoE’s move represented its fourth consecutive rate hike since December – the fastest increase in borrowing costs in 25 years – it signalled about further increases, despite its worries about a sharp economic slowdown.

The BoE said most policymakers believed “some degree of further tightening in monetary policy may still be appropriate in the coming months”.

It dropped the word “modest” to describe the scale of rate hikes ahead.