This result marks the first increase in the so-called banking tax since the onset of the economic crisis caused by the corona virus
The Bank of England (BoE) announced on Thursday that it would raise the base rate by 15 basis points, from 0.10% to 0.25%, in order to control recent inflation in the UK. This result marks the first increase in the so-called banking tax since the onset of the economic crisis caused by the corona virus in March 2020.
The rise in interest rates was not unanimous in the Monetary Policy Committee (MPC) as Silvana wanted to maintain Tenriro and opposed the votes of eight other directors.
According to a report, the bank ruled that some “moderate austerity” was needed to ensure that inflation returns to the 2% target. The BoE decided to maintain the £ 895 billion size easing (QE) program with full member approval.
Citing the appearance of the Ômicron variant of the corona virus, the company’s panel reduced its forecast for GDP growth in the fourth quarter from 1% to 0.5% compared to the previous quarter. In the BoE view, the strain should weigh on performance in the short term, but the impact on inflation is still uncertain.
BoE analysts predict that inflation will be around 5% for most of the British winter and 6% by April 2022. Energy, however, is forecast to decline in the second half of next year.
In this scenario, the BoE says it has decided to raise interest rates, indicating that the “tight” labor market and inflation will continue.
Although some analysts have suggested the possibility of raising interest rates, the market as a whole expects the benchmark interest rate to remain at 0.1% due to the strong impact of Ômicron in the UK. The country has again tightened restrictions on movement and registered case records.
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