The Bank of England on Thursday agreed to implement its fifth consecutive interest rate hike in order to tame surging inflation in the kingdom.
The Monetary Policy Committee voted 6-3 to increase the policy rate by 25 basis points to 1.25% with three hawkish members voting for the bank to raise the rate by 50bp to 1.50%.
The central bank said in a statement with the same tone as the U.S. Federal Reserve that it will take the actions necessary to return inflation to the 2% target sustainably in the medium term. The scale and pace of future hikes will depend on the economic outlook and inflationary pressures.
The raise in June came after the central bank decided to hike its policy rate by 25bp to 1%, which was the highest level in 13 years and warned that the British economy was at risk of falling into recession.
The inflation data at 9% in April played a great role in prompting the Bank of England into hiking its interest rate in June amid surging food and energy prices. The bank expected inflation to hit 11% in October.