Economic growth in Britain showed signs of slowing down in June, while inflation remained persistently high to the point that the central bank stated that it would tighten monetary policy further to bring the price growth down.
A flash data from S&P Global’s Composite Purchasing Managers’ Index (PMI), which covers businesses in the services and manufacturing sectors, dropped to a three-month low of 52.8 in June, compared to 54.0 in May. The service sector grew at the slowest pace in three months, while the manufacturing sector contracted by the most in six months.
The Bank of England raised its policy benchmark rate by a whopping 50 basis points, which beat a Reuters poll for a 25bps hike. It also said to continue raising the rate to tame inflation that was growing at 8.7% in May.
BoE’s interest rates are now at 5.0% after its 13th hike yesterday.