The Bank of England (BoE) has hiked interest rates from 4.5 percent to 5 percent, a more aggressive jump than previously expected.
It’s the 13th consecutive rate increase in 18 months, and this level was last seen in April 2008 before the central bank began slashing rates during the financial crisis.
The BoE was previously expected to raise bank rates to 4.75 percent, where it was predicted to peak, but after Wednesday’s figure showed core inflation stuck at 8.7 percent in May, traders have anticipated a surprise 0.5 percent jump on Thursday and a peak of 6 percent early next year.
Seven members of the BoE’s Monetary Policy Committee (MPC) voted to increase bank rates to 5 percent as inflation pressure from the wage-price spiral is “likely to take longer to unwind than they did to emerge,” the MPC said….