The Bank of England raised its key interest rate from 2.25% to 3.00%. The interest rate increase was in line with expectations.
The Bank of England has raised its interest rate since December last year. This time’s interest rate increase of 0.75 percentage points has been the largest in the current rate increase cycle. The last time the bank raised its interest rate by the same amount was in 1989.
In the two previous withdrawals, the interest rate increased by 0.50 percentage points, and before that it was lower.
The bank foresees very challenging times ahead and a long recession ahead. However, according to the Financial Times business magazine, the bank instructed that the key interest rate does not need to be raised much more in order for inflation to reach the two percent target.
Norway restrained its own rate hike
Earlier today, the central bank of Norway raised its key interest rate from 2.25% to 2.50%, while expectations were for an increase to 2.75%.
The Norwegian central bank was one of the first western central banks to start raising interest rates last September. The oil state’s economy has grown as oil prices have risen.
According to the central bank, behind the lower-than-expected interest rate increase were signs of the economy slowing down and easing of inflationary pressures.
Nordea’s chief analyst Jan from court commented on the Norwegian central bank’s interest rate hike on Twitter.