London (EFE).- The Bank of England on Thursday raised UK interest rates by 0.50 percentage points to 2.25%, their highest level since December 2008.

The UK central bank’s monetary policy committee accelerated rate hikes to tackle inflation, which stood at 9.9% in August, against its official target of 2%.

The increase in the price of silver in the UK comes after the United States yesterday raised interest rates in the country by 75 basis points, which are in a range between 3 and 3.25 %, also its highest level in 14 years.

Bank of England facade
The Bank of England, in a file image. EFE/EPA/ANDY RAIN

For its part, the European Central Bank (ECB) also raised them to 1.25% on September 8, the largest increase in its 24-year history.

The Bank of England committee also voted unanimously to reduce its portfolio of government bonds purchased under its quantitative easing program, introduced during the 2009 financial crisis.

Thus, it plans to reduce it by 80,000 pounds (91,500 million euros, at today’s exchange rate) in the next twelve months, to 758,000 million pounds (870,000 million euros), he says in his press release.

British recession

The entity estimates that the national gross domestic product (GDP) could have contracted by 0.1% between July and September, which, added to the contraction of 0.1% between April and June, would mean that the UK is already in recession.

One euro note and one pound note
A 20 euro note and a 20 pound note in London, in a file image. EFE/Andy Rain

It also changed its inflation forecast, which now peaks at 11% in October, from 13% previously forecast, saying government plans to contain energy prices will help dampen the consumer price index. (CPI).

Regarding rates, five members of the monetary policy committee voted to increase the rate by these 0.5 percentage points, three advocated increasing it by 0.75 points and one would have preferred an increase of 0.25, explains the entity.

The commission warns that it will analyze at its November meeting the impact on its economic forecasts and the possible impact on rates of the new “growth” plan that the Conservative government of Prime Minister Liz Truss will present this Friday.

El Ejecutivo ha indicado que prepara medidas potencialmente inflacionarias y que aumentan la deuda pública, como una rebaja del impuesto de sociedades y la eliminación del tope al bono de los banqueros, además de los préstamos guaranteed a las distribuidoras de energía para que limiten el aumento de bills.

The Bank of England is also monitoring the evolution of the pound sterling, which has depreciated sharply against the dollar for fear of the state of British finances.

Web edition: Rosa Corona

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